Johnson Controls (JCI.US) will sell its HVAC assets to Bosch for $8.1 billion.
Johnson Controls (JCI.US) is to sell its residential and light commercial (R&LC) heating, ventilation and air conditioning (HVAC) business to Bosch for $8.1bn. The stock rose as much as 3.5 per cent premarket on the news.
The all-cash deal includes the company's North American pipe business and its 60 per cent-owned residential joint venture with Hitachi (HTHIY.US), which will retain some of its Japanese HVAC assets.
Johnson Controls will receive about $6.7bn, of which about $4.6bn will come from its North American pipe business and about $2.1bn from its equity in the joint venture.
The deal is an important part of Johnson Controls' strategic review of non-core product lines and will make it a pure commercial building solutions provider.
The company expects to use some of the proceeds from the deal to pay down debt and return the rest to shareholders.
The deal is expected to close in the second quarter.
Johnson Controls also expects adjusted earnings per share in the third quarter to be slightly higher than its previous guidance. It will report third-quarter results on July 31.