#Ireland #Johnson Controls #Cork #Bosch Group #HVAC Business

Johnson Controls Sells Residential and Light Commercial HVAC Division to Bosch

In a transformative step aimed at strengthening its market focus, Johnson Controls International plc (NYSE: JCI), known for its cutting-edge contributions to building technology, has successfully finalized the sale of its Residential and Light Commercial (RLC) HVAC sector to the Bosch Group. The transaction, valued at $8.1 billion, underscores Johnson Controls' shift towards becoming a pure-play provider of innovative building solutions.

CEO Joakim Weidemanis expressed that this deal marks an essential milestone in the company’s transformation journey. He emphasized the commitment to evolving into a faster-growing and more profitable technology-driven organization. "This is a pivotal moment in our evolution, and with the sale, we anticipate unlocking solutions tailored to meet the demands of the modern consumer and the industry landscape,” he stated.

As part of the agreement, Johnson Controls will receive an estimated $6.7 billion from the transaction, resulting in net cash proceeds of around $5.0 billion, after accounting for taxes and related expenses. This financial maneuver aligns with the company's ongoing commitment to rewarding its shareholders. Johnson Controls plans to initiate a $5 billion accelerated share repurchase program, adhering to its previously outlined capital allocation policy.

The transaction encompasses the North American ducted business and the global residential joint venture with Hitachi, Ltd. Hitachi will continue to manage specific ductless HVAC assets, particularly those located in Shimizu, Japan, further diversifying the operational landscape in the HVAC industry.

Critical advisors in this high-stakes transaction included Centerview Partners and Citi as financial advisors, alongside Simpson Thacher serving as legal counsel and Joele Frank for investor relations management. This collaborative advisory approach reflects the complex nature of the deal and aims to position Johnson Controls favorably for future market opportunities.

The sale not only enhances Johnson Controls' strategic focus but also reflects significant industry trends where companies are realigning their core operations to improve technological capabilities and customer engagement. Weidemanis acknowledged the dedicated efforts of the RLC HVAC team, wishing them success as they transition to their new roles with Bosch.

With nearly 140 years of innovation behind it, Johnson Controls continues to lead the charge in transforming environments across various sectors. The company’s dedication to reimagining building performance using sustainable practices through its OpenBlue digital platform remains a cornerstone of its operational strategy. The comprehensive range of services provided by Johnson Controls fuels its objective to create smart, healthy, and sustainable buildings that contribute positively to individuals’ lives and community environments.

Looking forward, Johnson Controls is poised to navigate the evolving landscape of building technology. By concentrating on its core competencies and embracing innovation, the company expects to enhance its service offerings while creating value for customers, shareholders, and the broader community.

In conclusion, as Johnson Controls embarks on this new chapter post-sale, the focus will remain on technological advancement, market leadership, and sustainable practices, all integral to shaping the future of the building solutions industry. This significant step forward is expected to not only redefine the company's trajectory but also enhance customer satisfaction and engagement through dedicated innovation and services.