Johnson Controls Inc. announced that it sent a letter May 20 to Visteon Corporation expressing interest in acquiring Visteon's interiors and electronics businesses. Johnson Controls is offering $1.25 billion in cash for the businesses, subject to due diligence, the execution of a definitive agreement and the approval of the Johnson Controls Board of Directors.
"We believe that Visteon's interiors and electronics businesses would be an excellent strategic fit with our Automotive Experience business," said Stephen A. Roell, Johnson Controls chairman and chief executive officer. "This acquisition would significantly expand our automotive interior technologies and capabilities. It would provide global scale and complementary products to our automotive electronics offerings. Importantly, it would broaden and deepen our global automotive customer relationships."
Visteon interiors and electronics businesses are leaders in the fast-growing Chinese automotive interiors industry. 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.
Visteon's major customers and Chinese joint venture partner support the transaction, according to Johnson Controls. The company said it believes its offer would provide superior value to Visteon's stakeholders and that it could move quickly, assuming Visteon's cooperation. It also said it expects the acquisition would have meaningful cost synergies.
Johnson Controls initially contacted Visteon regarding its interest in the interiors and electronics businesses in January 2010 and made subsequent contacts on May 7 and May 20. No other terms or details of the proposed transaction have been disclosed, pending customary due diligence and negotiations. Wachtell, Lipton, Rosen & Katz and JPMorgan Securities have been retained by Johnson Controls to assist in the transaction.
About Johnson Controls
Johnson Controls is a global leader that brings ingenuity to the places where people live, work and travel. By integrating technologies, products and services, the company creates smart environments that redefine the relationships between people and their surroundings. Its team of 130,000 employees creates a more comfortable, safe and sustainable world through products and services for more than 200 million vehicles, 12 million homes and one million commercial buildings.