JCI-Hitachi confirms $8.1bn JV sale to Bosch
23rd July 2024
JAPAN/USA/GERMANY: Johnson Controls and Hitachi have confirmed an agreement to sell their European air conditioning joint venture business to German manufacturer Robert Bosch in an $8.1bn deal.
The transaction includes the North America ducted business and global residential joint venture with Hitachi, of which Johnson Controls owns 60% and Hitachi owns 40%.
As part of the transaction, the Johnson Controls-Hitachi (JCH) Shimizu factory, a development and manufacturing base for commercial air conditioning equipment, will be transferred to Hitachi Global Life Solutions Inc (Hitachi GLS).
The new company, with its new shareholder Bosch, and Hitachi GLS will enter into a brand license agreement for the new company to continue providing Hitachi-branded air conditioning equipment globally. In addition, Hitachi GLS says it will leverage Bosch’s footprint in Europe to strengthen the global rollout of highly competitive Hitachi-branded air conditioning equipment through Bosch and the new company.
By transferring the Shimizu factory to Hitachi GLS and integrating the development, manufacturing, sales and maintenance services of the commercial air conditioning business in Japan, Hitachi GLS will be able to develop highly competitive products that meet market needs.
In a statement, Hitachi said the deal would enhance its competitiveness in the global air conditioning industry, which is undergoing consolidation. “Hitachi, and Hitachi GLS together with JCI, identified Bosch as the best partner to enable further growth of the global air conditioning business due to its footprint in Europe and its track record in heating business,” it said.
Johnson Control said the transaction would substantially simplify its portfolio with enhanced strategic focus, aligned with the company’s objective to be a pure-play provider of comprehensive solutions for commercial buildings. “The transaction represents a significant portion of the company’s previously announced strategic evaluation of non-core product lines,” it said.
Johnson Controls’ R&LC HVAC business generated approximately $4.5bn in consolidated revenue in 2023.
Following the close of the transaction, Johnson Controls R&LC HVAC business will continue to provide residential and light commercial HVAC products under the York and Hitachi brands as well as Coleman, Champion, Luxaire, Guardian, Evcon, TempMaster and others.
Dr Christian Fischer, deputy chairman of Bosch, said that the deal would accelerate his company’s worldwide growth. “JCH and Bosch complement each other perfectly, both regionally and in terms of products. We are honoured to be allowed to license the prestigious and highly esteemed Hitachi brand and will ensure that the exceptional quality and renowned standards are maintained. In addition, we will strive to consistently develop the business further – for the benefit of our customers, employees and other stakeholders.”
Hitachi GLS president Hideki Osumi said: “Bosch and Hitachi GLS will strengthen the global expansion of Hitachi-branded air conditioning equipment through the new company with the strong partnership. In the commercial air conditioning business in Japan, we will further promote the creation of added value by integrating the development, manufacturing, sales, and maintenance services.”
The transaction is expected to close in approximately 12 months.
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