Johnson Controls International plc plans to sell its residential and light commercial HVAC business to
Bosch Group for a total consideration of $8.1 billion.
"We are pleased to have reached this pivotal milestone, which accelerates our transformation and positions Johnson Controls as a simpler, higher-growth company," said
George Oliver, chairman and chief executive officer of Johnson Controls. "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 center 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."
The residential and light commercial HVAC business is part of JCI’s global products segment. It generated $4.5 billion in consolidated revenue in fiscal 2023. The global products business generated $9.6 billion and the company had sales of $26.8 billion.
"Johnson Controls' Residential & Light Commercial business has a consistent track record of excellence within the HVAC industry,” said
Christian Fischer, deputy chairman of the board of management of Robert Bosch GmbH. “Together with our future colleagues in the acquired business, we want to seize the huge opportunities offered by the market for the further growth of this new unit. The acquired entities will strengthen Bosch's Home Comfort Group in an extremely attractive segment and will become part of the Bosch core business."
Johnson Controls, which is based in Ireland but has its operational headquarters in Glendale, will receive $6.7 billion.
The deal includes JCI’s North America ducted business and the global residential joint venture the company has with
Hitachi. Johnson Controls has a 60% stake in the joint venture and Hitachi owns 40%. Hitachi will retain some assets in Japan.
Johnson Controls expects net cash proceeds of $5 billion after tax and transaction-related expenses. The company will use proceeds to pay down debt “to the extent required to retain its investment grade rating.” The remaining proceeds would be available to be returned to shareholders, the company said.
The deal is JCI’s second major divestiture of the year. In June, the company said it was
selling its air distribution technologies business to Los Angeles-based private equity firm Truelink Capital for an undisclosed price.
Johnson Controls executives said earlier this year the company was reviewing strategic alternatives for its non-commercial product lines.
Selling the residential and light commercial HVAC business will leave a portfolio that 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.”
