Key Takeaways
- Johnson Controls International has sold its residential and light commercial HVAC business to Bosch for a total of $8.1 billion.
- Johnson Controls will receive $6.7 billion from the deal, which includes a joint venture with Hitachi in which it holds a 60% stake.
- CEO George Oliver said the sale was part of Johnson Controls' effort to become a simpler, faster-growing company.
Johnson Controls International (JCI) has sold its residential and light commercial HVAC business to Germany-based engineering and technology company Bosch for a total consideration of $8.1 billion.
The deal includes Johnson Controls' North American ductwork business and a global housing joint venture with Hitachi, in which Johnson Controls holds a 60% stake. Johnson Controls said it expects to receive about $6.7 billion from the transaction.
Conducted a strategic review of non-core product lines
The building products and systems provider said the deal “significantly simplifies our portfolio, strengthens our strategic focus and is aligned with our goal of becoming a pure play provider of integrated solutions for commercial buildings.”
The company added that the move represents “an important part of the company's previously announced strategic evaluation of its non-core product lines.”
Chief Executive George Oliver said the sale will create a simpler, faster-growing Johnson Controls company, and is expected to close within the next 12 months.
Johnson Controls raises profit outlook
In addition, Johnson Controls said it now expects adjusted earnings per share for the current quarter to be slightly above its previous guidance of $1.05 to $1.10. The company will report its results on July 31st.
Johnson Controls shares were down 1.3% to $69.30 in recent trading. Despite the decline, the company's shares are still up about 21% since the beginning of the year.
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