According to Matia Grossi, industry analyst for Frost & Sullivan Physical Security group "UTC had already made a few acquisitions in the security market which gave the company great integration capabilities and a dominant position in the fire detection space; with the acquisitions of companies such as Chubb, Red Hawk, Kidde and Lenel. However, the company needed to gain access to a full product portfolio and GE Security is providing that to UTC. With this acquisition, UTC has made a giant leap in the attempt to widen its capabilities and fulfill the need of offering its client a real 'one-stop-solution'."

The company can now compete in the market with companies such as Tyco and Schneider which have operated aggressively in recent years in the M&A field. Grossi continues on this saying: "If we look at Tyco, the
similarities between the two companies are staggering. Tyco acquired ADT which would be the equivalent of Chubb for UTC, Software House of Lenel. Then Tyco proceeded to a number of acquisitions in the physical
security space of companies such as American Dynamics, Sensormatic, DSC and many others. UTC was able to fill in the gaps in its portfolio in one stop."

"From a GE Security perspective that was in line with a divestment process from its security space started with the sale of GE Security's Homeland Protection Business to Safran, only a few months back. In a converging market this move only makes sense if the long term plan is to exit it," adds Archana Rao, senior research analyst for Frost & Sullivan Electronics Security group.

"Frost & Sullivan expects the consolidation process to continue in the coming years because of the technology convergence in the market. We are going to see new players coming from the telecom market such as Alcatel Lucent, Nokia (-Siemens) and others looking at the huge
potential of leveraging their network infrastructure capabilities in the fast growing security market," concludes Matia Grossi.

Matia Grossi is an industry analyst with the Frost & Sullivan Physical Security group in European Electronics and Security Practice. He focuses on monitoring and analyzing emerging trends, technologies and market dynamics in the security industry and market worldwide,
specializing on Europe.

Archana Rao is a Senior Research Analyst with the Frost & Sullivan Electronics and Security Practice. Her primary focus is on market behavior and proposing strategies and recommendations for market participants in the European Security Industry.