Friday, November 15Serving the aftermarket

Johnson Controls sells Varta Battery

Johnson Controls has sold its Power Solutions business to Qubec-based Brookfield Business Partners, in a deal worth $13.2 billion (£10.3 billion).

The move means that the company is exiting the automotive industry, and will see the Varta brand transfer to Brookfield.

This announcement marks a significant milestone in the ongoing transformation of the Johnson Controls portfolio,” said chairman and chief executive officer George Oliver. “The sale of our Power Solutions business will create value for investors by streamlining our portfolio and giving us increased financial flexibility to strengthen our balance sheet, return capital to shareholders and create optionality in our Buildings business. This focused portfolio will allow us to capitalize on secular growth trends and to deliver strong financial performance through improved free cash flow conversion, lower capital intensity and continued margin expansion.”

Johnson Controls believes it is leaving the business in a strong position, with it able to compete in a changing market as electric vehicles start to rise to prominence.

Brookfield Business Partners expects to fund approximately 30% of the equity, while CDPQ, an institutional investor that manages several public and parapublic pension plans and insurance programs in Quebec, will fund about 30%, with the balance being funded by other institutional partners.

Oliver continued, “With this transaction, Johnson Controls becomes a pure-play building technologies and solutions provider that is better positioned to lead the integration and evolution of the connected building and to capture strategic opportunities in the HVAC industry. I would like to thank the Power Solutions team for their significant contributions over the years and their dedication throughout the strategic review process.”