Robert Bosch to buy Johnson Controls assets in US$8bil deal

Bosch said the addition would strengthen its presence in the United States and Asia. — Reuters

BERLIN: Robert Bosch has agreed to acquire Johnson Controls’ and Hitachi’s residential ventilation businesses for US$8bil, it says in what will be the German engineering group’s largest takeover to date.

Bosch said Johnson’s heating, ventilation and air conditioning (HVAC) business for residential and small commercial applications would strengthen its Bosch Home Comfort arm, boosting the division’s sales to €9bil (US$9.8bil) from €5bil currently.

Johnson Controls International (JCI) said separately that it stands to receive US$6.7bil in cash from the transaction.

Bosch said the addition would strengthen its presence in the United States and Asia, including sales of heat pumps as the company looks to capitalise on global efforts to reduce oil and gas heating to cut greenhouse gases.

The sale of the JCI assets includes its North America ducted business and a joint venture with Japanese group Hitachi, which holds a 40% stake.

Bosch said it expects the global market for the heating and cooling of buildings to grow 40% by 2030, driven by technological progress, the fight against climate change and new regulations.

The deal will be funded through cash on their balance sheet, the company added.

JCI said the transaction includes ductless HVAC production sites in Shimizu, Japan, which Hitachi will acquire.

Bosch chief executive officer Stefan Hartung said the company was looking at bigger, potentially global, acquisition targets and that the group was open to listing some of its divisions on the stock market.

Bosch was weighing a bid for US appliances manufacturer Whirlpool, Reuters reported last month.

Bosch is no longer pursuing such a deal with Whirlpool after deeming the agreement with Johnson Controls and Hitachi more attractive, according to people familiar with the matter who requested anonymity.

Hartung declined to comment on Whirlpool on Tuesday but said that the Johnson-Hitachi deal would keep the company busy for 12 months.

Bosch, which had revenue of about €92bil last year, also makes car parts, factory gear, power tools and home appliances. — Reuters