Nov. 10 (Bloomberg) -- United Technologies Corp. is nearing an agreement to buy General Electric Co.’s fire alarm and security systems unit for at least $1.8 billion, according to two people familiar with the matter.

The purchase may be announced as early as Nov. 12, said the people, who declined to be identified because the agreement isn’t public.

The deal would bolster United Technologies Chief Executive Officer Louis Chenevert’s strategy of offering service contracts for equipment and systems in commercial buildings, locking revenue streams over years. Chenevert last week said his company was a “willing buyer” across its industries, and singled out the fire and security division as an area of focus.

John Moran, a spokesman for Hartford, Connecticut-based United Technologies, and GE spokeswoman Michelle May both said their companies won’t comment on market speculation.

“We are a willing buyer” in fire and securities businesses, Chenevert said during a Webcast of a presentation at the Goldman Sachs Global Industrial Conference. That’s because the market in the area is about $100 billion and “we are $6 billion players and there’s a lot of room to grow.”

GE fell 7 cents to $15.78 at 4:15 p.m. in New York Stock Exchange composite trading, while United Technologies was unchanged at $66.73. United Technologies, which also makes Sikorsky helicopters and Pratt & Whitney jet engines, has risen about 25 percent this year. Fairfield, Connecticut-based GE, the world’s biggest maker of jet engines and medical-imaging equipment, has declined 2.6 percent.

United Tech Unit

United Technologies built its Fire & Security unit earlier this decade with purchases of the Kidde fire and Chubb security brands. Chenevert last year promoted Ari Bousbib to oversee Otis, Carrier and UTC Fire & Security, which contribute about 60 percent of total company sales.

GE, which doesn’t provide earnings for its security division, last year predicted it would have about $3 billion in sales by 2011, up from more than $1.8 billion in 2007.

Chief Executive Officer Jeffrey Immelt built GE’s security unit via acquisition, including the $1.4 billion purchase of fire-prevention equipment maker Edwards Systems Technology from SPX Corp. in 2005.

United Technologies is likely interested in GE’s Edwards operations, said Nicholas Heymann, a New York-based analyst with Sterne, Agee & Leach. He said the Edwards business offers building management systems that help control commercial structures during fires, earthquakes or other emergencies.

“This really helps take them beyond just perimeter and access security,” Heymann said of United Technologies.

GE Uses for Money

As for GE, Heymann said the sale will give it money to help fund acquisitions, including a bid for the transmission and distribution unit of Paris-based Areva SA, the world’s biggest builder of nuclear reactors.

“They have no shortage of interests in what to do with the cash,” Heymann said. “I don’t imagine it will burn a hole in their pockets.”

GE agreed to sell an 81 percent stake in a part of its security division, the Homeland Protection unit that provides technology for airports, to Paris-based Safran SA for $580 million in April.

To contact the reporters on this story: Rachel Layne in Boston at rlayne@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net;

Last Updated: November 10, 2009 17:28 EST