Johnson Controls, Hitachi announce joint venture
Companies expect joint venture to begin operations in 2014
Johnson Controls and Hitachi have signed a non-binding Memorandum of Understanding (MoU) for a transaction in which Johnson Controls will obtain a 60% ownership stake in Hitachi Appliances' global air conditioning business, excluding sales and service operations in Japan and certain other assets.
The companies expect the joint venture to begin operations in 2014, subject to final due diligence and board approvals, definitive agreement on terms, required regulatory approvals and other customary conditions.
Building on the leadership of both companies, the partnership will include key products such as variable refrigerant flow (VRF) and inverter technologies supporting both the commercial and residential markets. The joint venture will combine Johnson Controls' global reach with Hitachi's technology expertise.
"Technology leadership derived from its ongoing investments in research and development has established Hitachi as a key contributor to the global HVAC industry," said Alex Molinaroli, president and chief executive officer, Johnson Controls.
"The addition of these capabilities adds key technologies to our product portfolio," Molinaroli said. "Combined with our existing $15bn building technologies and services business, this investment positions Johnson Controls as the world's largest commercial air conditioning provider."
"Both companies have a long and proud history of innovation and growth in the industry with similar values and cultures," said Hiroaki Nakanishi, president, Hitachi. "As the worldwide air conditioning business environment continues to evolve, we believe Johnson Controls and Hitachi's partnership can supply integrated solutions to fulfill the needs of customers around the world."
The proposed joint venture comes at a time when the worldwide air conditioning market is rapidly changing. Customers are increasingly demanding air conditioning options with better energy efficiency in response to an increase in energy-saving and environmentally-protective regulations.
"This is great news for our customers who will benefit from the full range of solutions, equipment and service that Johnson Controls and Hitachi can offer them on a global scale," said Molinaroli.
Nakanishi added: "Alongside this joint venture, we look forward to exploring further opportunities to collaborate with Johnson Controls and Hitachi's broad building solution business capitalising on IT-related technologies."