Johnson Controls may hike its $1.25 billion bid for Visteon after due diligence
25 May 2010
US-based maker of auto ancillaries and batteries Johnson Controls Inc said yesterday that it could hike its unsolicited $1.25-billion offer for bankrupt Michigan-based supplier of auto parts Visteon Corporation's interiors and electronics businesses after it completes due diligence.
On 21 May 2010 Milwaukee-based Johnson Controls, a Fortune 100 company had made an unsolicited bid of $1.25 billion in cash for acquiring Visteon's interiors and electronics businesses, subject to due diligence, the execution of a definitive agreement and the approval of the Johnson Controls board of directors.
Founded in 2000 and based in Michigan, Visteon, formerly owned by Ford Motors, makes interiors and electronics businesses supplies automotive systems, modules, and components to automotive original equipment manufacturers, as well as to other suppliers and assemblers worldwide. It is a leader in the fast-growing Chinese automotive interiors industry.
However, it had been hit by the downturn in the auto induistry and has been scaling back its operations for some time now and last year cut 2,800 jobs and announced another 800 cuts. The company has been in a three-year restructuring after a bailout by former parent Ford Motor Co in 2005.
Johnson Controls, with 23 joint ventures and 40 manufacturing facilities in China, is the leading provider of automotive seating systems. In China, both Visteon and Johnson Controls do business primarily through non-consolidated joint ventures.
With the addition of Visteon's operations, Johnson Controls Automotive Experience consolidated and non-consolidated revenues in China could exceed an estimated $7 billion in 2011.
But Visteon, currently under Chapter 11, said in a statement that Johnson Controls is a competitor and is trying to benefit by delaying its plan of emerging from its bankruptcy reorganisation plan.
With 2009 revenues of over $34 billion, Johnson Controls operates three business units- automotive, building efficiency and power solutions.