International. Johnson Controls International announced that it has entered into a definitive agreement to sell its residential and light commercial (R&LC) HVAC business to the Bosch Group.
The transaction includes the pipeline business in North America and the global residential joint venture with Hitachi, of which Johnson Controls owns 60% and Hitachi owns 40%. The total transaction is valued at $8.1 billion and the Company's share of consideration is approximately $6.7 billion. As part of the transaction, Hitachi will retain certain ductless HVAC assets located in Shimizu, Japan.
Following the closing of the transaction, Johnson Controls' portfolio will be substantially simplified with an enhanced strategic focus, aligned with the company's goal of being a unique provider of end-to-end solutions for commercial buildings. The transaction represents an important part of the company's previously announced strategic evaluation of non-core product lines.
"We are thrilled to have reached this critical milestone, which accelerates our transformation and positions Johnson Controls as a simpler, faster-growing company," said Johnson Controls President and CEO George Oliver. "Johnson Controls is already benefiting from our transformation, which enables the unparalleled value proposition we offer customers and exposure to rapidly accelerating demand in the data center market and other key macroeconomic trends. We believe Johnson Controls is well-positioned for its next phase of growth to deliver enhanced long-term value to shareholders."
Johnson Controls' R&LC HVAC business, which is part of the Global Products segment, designs and manufactures ducted and ductless HVAC equipment and components globally for residential and light commercial applications. In fiscal 2023, R&LC's HVAC business generated approximately $4.5 billion in consolidated revenue. Following the closing of the transaction, R&LC's 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.
Christian Fischer, Vice Chairman of the Board of Management of Robert Bosch GmbH, said: "Johnson Controls' residential and light commercial business has a consistent track record of excellence within the HVAC industry. Together with our future colleagues in the acquired business, we want to take advantage of the enormous opportunities offered by the market for further growth of this new unit. The acquired entities will strengthen Bosch's Home Comfort Group in an extremely attractive segment and become part of Bosch's core business."
