Johnson Controls Agreed To Sell Its Residential And Light Commercial HVAC Business, Including Its North America Ducted Business And 60% Stake In The Johnson Controls-Hitachi Air Conditioning Joint Venture, To Robert Bosch GmbH For ~$8.1B In Cash, With Johnson Controls Receiving About $6.7B, Subject To Adjustments, Plus The Assumption Of Certain Liabilities, While Hitachi Sells Its 40% Interest In The Joint Venture And Acquires Specific Assets As Part Of The Deal.
On July 23, 2024, Johnson Controls International plc (the "Company" or "Johnson Controls") entered into a Stock and Asset Purchase Agreement (the "Purchase Agreement") with Robert Bosch GmbH, a Gesellschaft mit beschränkter Haftung ("Purchaser"). Pursuant to the Purchase Agreement, on the terms and subject to the conditions therein, the Company has agreed to sell, and Purchaser has agreed to acquire, the Company's Residential and Light Commercial HVAC business (the "Business"), including the Company's North America Ducted business and Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd. ("JCH"), the Company's global Residential joint venture with Hitachi Global Life Solutions, Inc. ("Hitachi"), of which the Company owns 60% and Hitachi owns 40%. The total consideration payable by Purchaser to the Company and Hitachi is equal to approximately $8.1 billion in cash, and the Company's portion of the aggregate consideration is approximately $6.7 billion in cash (the "Purchase Price"), in each case, subject to adjustment, plus the assumption by Purchaser or its affiliates of certain liabilities of the Business specified in the Purchase Agreement. In connection with the transaction, Hitachi has agreed to sell to Purchaser its 40% interest in JCH (the "JCH Stock Sale"), and the parties have agreed to transfer to Hitachi certain of JCH's ductless HVAC assets located in Shimizu, Japan (the "Shimizu Sale").
As described in greater detail in the Purchase Agreement, the Purchase Price will be (i) increased or decreased to the extent the Working Capital (as defined in the Purchase Agreement) of the Business as of the closing of the transactions contemplated by the Purchase Agreement (the "Closing") is higher or lower than a specified target amount, (ii) decreased by the amount of any Funded Debt (as defined in the Purchase Agreement) as of the Closing, (iii) increased by the amount of any Cash Amounts (as defined in the Purchase Agreement), (iv) increased by the prorated amount of the purchase price for the Shimizu Sale and (v) decreased by the amount of any Transaction Expenses (as defined in the Purchase Agreement).
