Johnson Controls Sold Part of Its Business to Bosch for $6.7 Billion
Johnson Controls International has reached a definitive agreement to sell its Residential and Light Commercial HVAC business in an all-cash transaction to the Bosch Group.
The transaction includes the North America Ducted business and global Residential joint venture with Hitachi, Ltd., of which Johnson Controls owns 60% and Hitachi owns 40%. The total transaction is valued at $8.1 billion, and the company’s portion of the consideration is approximately $6.7 billion. As part of the transaction, Hitachi will retain certain ductless HVAC assets located in Shimizu, Japan.
Following the close of the transaction, the Johnson Controls portfolio will be substantially simplified with enhanced strategic focus, aligned with the Company’s objective to be a pure-play provider of comprehensive solutions for commercial buildings. Johnson Controls delivers a unique value proposition to customers, with its unmatched service and digital offerings that improve commercial building efficiency and reduce operational costs through its Openblue digital platform. The transaction represents a significant portion of the Company’s previously announced strategic evaluation of non-core product lines.
“We are pleased to have reached this pivotal milestone, which accelerates our transformation and positions Johnson Controls as a simpler, higher-growth company,” said Johnson Controls Chairman and CEO George Oliver. “Johnson Controls is already benefiting from our transformation, which enables the unparalleled value proposition we provide to customers, and exposure to rapidly accelerating demand in the data centre market and other key macro-economic tailwinds. We believe Johnson Controls is well-positioned for its next phase of growth to deliver enhanced, long-term value to shareholders.”
Christian Fischer, the deputy chairman of the board of management of Robert Bosch GmbH, said: “The acquired entities will strengthen Bosch’s Home Comfort Group in an extremely attractive segment and will become part of the Bosch core business.”
The transaction is expected to close in approximately 12 months, subject to required regulatory approvals and other customary closing conditions.
