Johnson Controls Inc. (JCI:US) plans to spin off its automotive-interiors business into a joint venture with China’s Yanfeng Automotive Trim Systems Co., which will be the majority owner.
Johnson Controls, the biggest U.S. auto-parts maker, will retain its seating business, spokesman Fraser Engerman said in an interview. Yanfeng will own 70 percent of the new Shanghai-based venture, with Johnson Controls owning the remainder, the companies said in a statement. It will have revenue of about $7.5 billion, according to the companies.
The move comes as Johnson Controls has been refocusing efforts on its building-effiency unit. In January, the company agreed to sell its electronics business to Visteon Corp. and considered options for its unprofitable interiors unit, which makes door and instrument panels.
The venture will have engineering and customer centers in the U.S., Europe, China, Japan and India, the companies said. The products being offered include instrument panels and cockpit systems, door panels and floor consoles. The non-cash transaction is expected to close in the first half of 2015, the companies said.
Yanfeng is a unit of Huayu Automotive Systems Co., which is owned by Shanghai Automotive Industry Corp.
The automotive-interiors business had annual sales of about $4.2 billion, Engerman said. Johnson Controls had sales (JCI:US) of $42.7 billion in the fiscal year ended Sept. 30.
Engerman didn’t say how many employees would be affected by the move. He said the terms are still being decided.
(Johnson Controls will hold a teleconference tomorrow at 4 p.m. N.Y. time, which will also be webcast at http://on.jci.com/1geroFH)
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