Johnson Controls, Hitachi to form global HVAC joint venture

Johnson Controls, Hitachi, Ltd and Hitachi Appliances, Inc.have  entered into a definitive agreement to form a global joint venture in the heating, ventilation and air conditioning and refrigeration segment.

Alex Molinaroli, chairman and CEO, Johnson Controls, and Hiroaki Nakanishi, chairman and CEO, Hitachi, announce their joint venture

The announcement came yesterday  during the participation of the companies at the World Economic Forum in Davos.

The new Johnson Controls-Hitachi joint venture will allow both companies to deliver the most diverse technology portfolio in the heating, ventilation, air conditioning and refrigeration industry.

Through the agreement, auto parts maker Johnson Controls will obtain a 60-per cent ownership stake in Hitachi Appliances' more than ¥300-billion sales (approximately $2.6 billion) global air conditioning business, excluding sales and service operations in Japan.

The Johnson Controls-Hitachi joint venture will bring customers a full range of air conditioning products, including world-class variable refrigerant flow (VRF) technology, leading-edge inverter technology based room air conditioners and absorption chillers – on top of existing Johnson Controls products that meet global customer demands.

With approximately 13,800 employees and 24 manufacturing plants, the joint venture will build on both organizations' technology, research and development leadership, as well as their expanding marketing channels. The transaction is expected to close later this year, subject to regulatory approvals and satisfaction of other customary conditions.

''For Johnson Controls, this partnership reflects our strategic commitment to our buildings business as a growth platform,'' said Alex Molinaroli, chairman and chief executive officer, Johnson Controls. ''The joint venture will propel us forward with superior products, enabling Johnson Controls to deliver the most diverse technology portfolio in the industry to meet customer demands across the changing global marketplace.''

The Johnson Controls-Hitachi joint venture management team will be led by Franz Cerwinka, as its chief executive officer. He has been with Johnson Controls for almost 20 years, having spent four years in Japan as vice president of finance for the Johnson Controls automotive business, including experience with more than 10 joint ventures.

Johnson Controls is a global multi-industrial company with 130 years of history in supplying heating, ventilation, air-conditioning, building controls, refrigeration and security systems for buildings. Through its Building Efficiency business, the company delivers solutions that increase energy efficiency and lower operating costs for over a million customers who are served through nearly 700 offices in more than 150 countries.

''The worldwide HVAC market is continuing to grow steadily, and the demand for energy efficient air conditioning systems with state-of-the-art technologies is expanding. As air conditioning systems are a key building block for building solutions, we believe this partnership will allow Hitachi and Johnson Controls to deliver the best solutions for our customers. Furthermore, in addition to air conditioning systems, we will be able to provide other building solutions that will enhance efficiencies throughout buildings, as well as surrounding areas,'' said Hiroaki Nakanishi, Chairman & CEO, Hitachi, Ltd.

A global home appliances and air conditioning solutions provider, Hitachi Appliances, a wholly owned subsidiary of leading global electronics and infrastructure solutions provider Hitachi, Ltd., supplies high quality, efficient and reliable air conditioning solutions across the globe, from residential room air conditioners to variable refrigerant flow systems, and other air conditioning equipment for commercial and industrial use. Hitachi Appliances will continue to provide Hitachi branded HVAC products in the Japanese market after this transaction.

Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries.

Diversified  Japanese multinational conglomerate headquartered in Chiyoda, Tokyo, is the parent of the Hitachi Group and operates in eleven business segments: information and telecommunication systems, social infrastructure, high functional materials and components, financial services, power systems, electronic systems and equipment, automotive systems, railway and urban systems, digital media and consumer products, construction machinery and other components and systems.

Hitachi Appliances, Inc., headquartered in Tokyo, was established in 1 April 2006, through the merger of Hitachi Air Conditioning Systems Co., Ltd. and Hitachi Home & Life Solutions, Inc. that were both wholly owned by Hitachi, Ltd.