In the biggest acquisition in its history, Bosch, the supplier of technology and services, plans to take over the global HVAC solutions business for residential and light commercial buildings from Johnson Controls.
As part of this transaction, Bosch also intends to acquire 100% of the Johnson Controls-Hitachi Air Conditioning (JCH) joint venture, including Hitachi’s 40% stake. The Bosch shareholders and supervisory board have approved the transaction. Binding agreements on the acquisitions were signed by the parties involved today.
The acquisition is subject to approvals from the antitrust authorities. The purchase price for the acquired businesses is $8 billion (€7.4 billion). The acquisition is expected to be closed in approximately 12 months.
Key milestone
“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,” says Stefan Hartung, chairman of the board of management of Robert Bosch GmbH.
“In taking this step, moreover, 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.”
Together with JCH, the businesses Bosch intends to acquire generated sales revenue totalling roughly €4 billion in 2023, and employ some 12,000 people worldwide. The transaction includes 16 manufacturing sites and 12 engineering locations in more than 30 countries. The product portfolio covers the entire spectrum of HVAC solutions for residential and light commercial buildings, and includes well-known brands such as York and Coleman in the US and Hitachi in Asia, for which Bosch will be granted a long-term licence.
Plans to double sales revenue
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, adds: “With this acquisition, Bosch will accelerate its growth and nearly double its sales revenue in the HVAC market to roughly €9 billion. 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 company expects the global HVAC market to grow 40% by 2030, driven by technological progress, the fight against climate change, and new regulations. “The acquired businesses will become part of the Bosch core business – and this will benefit customers, installation partners, and associates,” Fischer adds. “We have proved several times in the past that we can successfully integrate brands, take them forward through investments, and strengthen them.”
George Oliver, CEO of Johnson Controls, says: “Our leading residential and light commercial business and its world-class team perfectly complement the Bosch portfolio. We are confident that under Bosch’s leadership the business will continue to excel and deliver innovative products and service to its customers. We look forward to seeing their continued success.”
Jun Abe, executive officer and executive vice president at Hitachi, and executive officer and general manager of the Hitachi Connective Industries division, says: “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.”
Innovative, energy-efficient solutions
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. 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, says: “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. With our technology and our products, we can work together to make a bigger contribution to energy efficiency and to more comfort and a better quality of life for many people in light of global warming.”
Bosch intends to integrate the acquired businesses into the Home Comfort Group. The 14,600 associates of the existing Bosch Home Comfort Group generated sales of roughly €5 billion in 2023. Home Comfort is excellently positioned in the major segments of the heating market, of the heat-pump market, and of the market for heat pump-hybrid solutions, which comprise a heat pump and a fossil fuel-fired boiler for peak loads.
Workforce of 26,000
Following the transaction, the new unit will have a workforce of more than 26,000 and be able to benefit considerably from economies of scale and a complementary portfolio at the interface between heating and cooling.
Jan Brockmann, president of the Bosch Home Comfort Group, says: “With our successful heating technology in Europe, we already have a strong team and a sound foundation. Now is the right time for a bold step toward a global presence. Demand for air-conditioning solutions is growing especially fast.”
“In the US, for example, Bosch expects to see more than 50% growth by the end of the decade, and in Europe as well, strong growth of approximately 30% is forecast up to 2030. Together, we will be able to build on strong, well-established brands. We are looking forward to shaping the future of the Bosch Home Comfort Group with our future colleagues and their innovations and ideas,” Brockmann adds.
Strong presence
The HVAC business Bosch plans to acquire from Johnson Controls has an especially strong presence in the US and Asia. In the US, its portfolio focuses on ducted solutions in which air passes from a central source through ducts in order to heat or cool all rooms at the same time.
In Asia, it especially sells ductless solutions, where interior units in each room can heat or cool individually, as well as modern air-conditioning systems based on variable refrigerant flow (VRF) systems. This technology is used in commercial applications ranging from light commercial premises such as retail stores to large projects such as hotels and hospitals. The portfolio in these regions is supplemented by efficient air-water heat pumps, which Johnson Controls offers above all in Europe.
