Johnson Controls, Hitachi, Ltd. and Hitachi Appliances, Inc. have entered into a definitive agreement for a global joint venture while at the World Economic Forum in Davos, Switzerland. The new Johnson Controls-Hitachi joint venture will allow both companies to deliver a diverse technology portfolio in the heating, ventilation, air conditioning and refrigeration industry.
Through the agreement, Johnson Controls will obtain a 60 percent ownership stake in Hitachi Appliances' more than ¥300 billion sales (approximately $2.6 billion) global air conditioning business, excluding sales and service operations in Japan. The Johnson Controls-Hitachi joint venture will bring customers a full range of air conditioning products, including variable refrigerant flow (VRF) technology, inverter-based room air conditioners and absorption chillers in addition to existing Johnson Controls products.
With approximately 13,800 employees and 24 manufacturing plants, the joint venture will build on both organizations' technology, research and development leadership, as well as their expanding marketing channels. The transaction is expected to close later this year, subject to regulatory approvals and satisfaction of other customary conditions.
"For Johnson Controls, this partnership reflects our strategic commitment to our buildings business as a growth platform," said Alex Molinaroli, chairman and CEO, Johnson Controls. "The joint venture will propel us forward with superior products, enabling Johnson Controls to deliver the most diverse technology portfolio in the industry to meet customer demands across the changing global marketplace."
The Johnson Controls-Hitachi joint venture management team will be led by Franz Cerwinka, CEO. He has been with Johnson Controls for almost 20 years, having spent four years in Japan as vice president of finance for the Johnson Controls automotive business, including experience with more than 10 joint ventures.
"The worldwide HVAC market is continuing to grow steadily, and the demand for energy efficient air conditioning systems with state-of-the-art technologies is expanding. As air conditioning systems are a key building block for building solutions, we believe this partnership will allow Hitachi and Johnson Controls to deliver the best solutions for our customers. Furthermore, in addition to air conditioning systems, we will be able to provide other building solutions that will enhance efficiencies throughout buildings, as well as surrounding areas," said Hiroaki Nakanishi, chairman & CEO, Hitachi, Ltd. Hitachi Appliances will continue to provide Hitachi branded HVAC products in the Japanese market after this transaction.
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