USA and JAPAN: Johnson Controls has finally signed the deal which sees it taking a 60% stake in Hitachi’s air conditioning business.
The definitive agreement for the deal – first revealed in the Cooling Post at the end of 2013 – was signed at the World Economic Forum in Switzerland, yesterday. The new Johnson Controls-Hitachi joint venture will give both companies access to a diverse heating, ventilation, air conditioning and refrigeration technology portfolio.
Through the agreement, Johnson Controls will obtain a 60% stake in Hitachi Appliances’ $2.6bn global air conditioning business, excluding sales and service operations in Japan.
A statement from the two companies says: “The joint venture will build on both organisations’ technology, research and development leadership, as well as their expanding marketing channels.”
Importantly, the deal is seen to give Johnson Controls access to Hitachi’s VRF inverter air conditioning products and absorption chillers. Hitachi gains access to Johnson Controls’ sales channels in the US, where the energy efficiency of VRF technology is expected to make it the dominant technology over traditional ducted systems. Last month, fellow Japanese manufacturer Daikin announced plans for a $410m US production base for its VRF technology. It is also thought that the deal with Johnson Controls will open up the Chinese market to Hitachi products.
“For Johnson Controls, this partnership reflects our strategic commitment to our buildings business as a growth platform,” said Johnson Controls chairman and CEO Alex Molinaroli. “The joint venture will propel us forward with superior products, enabling Johnson Controls to deliver the most diverse technology portfolio in the industry to meet customer demands across the changing global marketplace.”
The Johnson Controls-Hitachi joint venture management team will be led by Franz Cerwinka as CEO. Cerwinka has been with Johnson Controls for almost 20 years, having spent four years in Japan as vice president of finance for the Johnson Controls automotive business, including experience with more than 10 joint ventures.
The joint venture, which will comprise 13,800 employees and 24 manufacturing plants, is expected to close later this year.
“The worldwide hvac market is continuing to grow steadily, and the demand for energy efficient air conditioning systems with state-of-the-art technologies is expanding,” said Hitachi’s chairman and CEO Hiroaki Nakanishi. “As air conditioning systems are a key building block for building solutions, we believe this partnership will allow Hitachi and Johnson Controls to deliver the best solutions for our customers. Furthermore, in addition to air conditioning systems, we will be able to provide other building solutions that will enhance efficiencies throughout buildings, as well as surrounding areas.”
Hitachi Appliances will continue to provide Hitachi branded hvac products in the Japanese market after this transaction.
VRF the key in Johnson/Hitachi deal – March 4, 2014
USA: The head of Johnson Controls has revealed that Hitachi’s VRF was a major reason behind its 60% stake in the company’s global air conditioning business. Read more…
Hitachi and JC to offer building solutions – February 1, 2014
JAPAN: Following their establishment of a global air conditioning joint venture, Hitachi and Johnson Controls say they will now co-operate on building solutions. Read more…