Bosch to buy Johnson Controls’ domestic HVAC business for huge expansion of heat pumps and AC
The Bosch Group is set to take over Johnson Controls’ global HVAC solutions business for residential and light commercial buildings in a €7.4bn deal.
The huge deal, the firm’s biggest acquisition in its history, will also see Bosch take over the Johnson Controls-Hitachi Air Conditioning joint venture, along with 16 manufacturing sites worldwide, enabling it to ramp up its heat pump and AC business globally.
The new portfolio ranges from air-to-water heat pumps to split AC for residential and VRF systems for commercial buildings. The acquisition, subject to approvals from the antitrust authorities, is expected to be closed in approximately 12 months.
Stefan Hartung, chairman of the board of management of Robert Bosch said:
As the biggest acquisition in Bosch history, this is an important milestone in the systematic implementation of our strategy for 2030. We are dynamically pushing ahead with the strong development of Bosch, and will achieve a globally leading position in the promising HVAC market with this acquisition.
The company said it expects the global HVAC market to grow 40% by 2030, driven by technological progress, the fight against climate change, and new regulations. Bosch added that it expects to see more than 30% growth in air conditioning in Europe by the end of the decade and 50% growth in the US.
Stefan added:
In taking this step, we will strengthen our presence in the US. and Asia and achieve a better balance among our business sectors. This is also part of our strategy. In this way, we will open up further growth opportunities and put the company as a whole on a firmer footing,“
The Hitachi and Johnson Controls businesses being acquired delivered turnover of around €4 billion last year and employ some 12,000 people worldwide. Bosch said the new portfolio ‘covers the entire spectrum of HVAC solutions for residential and light commercial buildings’.
Christian Fischer, the deputy chairman of the board of management of Robert Bosch GmbH who is responsible for the Bosch Group’s strategic growth initiatives, and thus for this planned acquisition, said:
With this acquisition, Bosch will accelerate its growth and nearly double its sales revenue in the HVAC market to roughly €9bn euros. Together with our future colleagues, we want to seize the huge opportunities offered by the market for the further growth of this new unit…The acquired businesses will become part of the Bosch core business and this will benefit customers, installation partners, and associates. We have proved several times in the past that we can successfully integrate brands, take them forward through investments, and strengthen them.”
Jun Abe, executive officer and executive vice president at Hitachi, added:
The new partnership with Bosch to establish a global air conditioning business is an important step. The market is dynamic, and is flourishing. I firmly believe that a global supplier such as Bosch, with its strong European presence and many years of experience in the heating business, is the optimum partner for further expanding the global air-conditioning business of the longstanding Hitachi brand.
Bosch noted that the current transformation in technologies and market conditions in the field of HVAC solutions ‘opens up huge opportunities for supplying innovative and energy-efficient solutions for mitigating global warming and the move to alternative energy. Heating technology is moving away from fossil fuels such as oil and gas toward heat pumps and heat pump-hybrid solutions. At the same time, air-conditioning technology is growing in importance both in Europe and worldwide.’
Bosch intends to integrate the acquired businesses into its Home Comfort Group, doubling it in the process. The company said it is now well-positioned in heating, heat pumps and hybrid solutions and offers a complementary portfolio at the interface between heating and cooling
Frank Meyer, the Bosch management board member responsible for the Energy and Building Technology business sector, and thus also for the Bosch Home Comfort Group and the integration of the new unit, added:
It is Bosch’s aim to play an active part in shaping the innovative and growing market for energy and building technology, and to occupy a globally leading position. With this acquisition, we are improving our position, especially in air conditioning. In addition, we will be able to globally expand our heat pump business and achieve greater economies of scale.
