Bosch to Buy Heating, Air-Conditioning Businesses From Johnson Controls, Hitachi for $8 Billion — Update

By Pierre Bertrand

Robert Bosch agreed to buy heating and air-conditioning operations from Johnson Controls International and Hitachi for $8.1 billion in its largest-ever deal as the group seeks to expand in the U.S. and Asia.

The German conglomerate plans to take over the heating, ventilation, and air conditioning operations for residential and light commercial buildings from Johnson Controls as well as the air-conditioning joint venture that Johnson Controls shares with Hitachi.

Bosch's operations span consumer goods, mobility, industrial, energy and building technology. The group said the acquisitions would hand it key exposure to the U.S. and Asia and nearly double its global sales in the heating, ventilation, and air-conditioning market to roughly 9 billion euros ($9.80 billion). Bosch expects that market to grow 40% globally by the end of the decade.

"With our successful heating technology in Europe, we already have a strong team and a sound foundation," said Jan Brockmann, president of Bosch's home comfort business. "Now is the right time for a bold step toward a global presence. Demand for air-conditioning solutions is growing especially fast."

The deal includes 16 manufacturing sites and 12 engineering locations across more than 30 countries, with roughly 12,000 employees. The company said brands such as York and Coleman in the U.S. and Hitachi in Asia--for which Bosch will be granted a long-term license--are also part of the deal.

Johnson Controls said it would pocket roughly $6.7 billion as part of the transaction that is expected to substantially simplify its own portfolio.

The businesses Bosch is seeking to acquire made roughly EUR4 billion in sales last year. Bosch said it would fold those operations into its home comfort business that will count more than 26,000 employees following the integration. The group expects to complete the deal in about a year, subject to approvals from antitrust officials.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

July 23, 2024 06:57 ET (10:57 GMT)

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