(Adds comment from analyst and more details about auto
electronics business)
By Ben Fox Rubin and Bob Tita
Johnson Controls Inc. (JCI) agreed to sell the remaining portion
of its automotive electronics business to automotive supplier
Visteon Corp. (VC) for $265 million.
Johnson Controls sold most of the electronics unit last year,
including its vehicle-based control system for remotely activating
garage doors and home lighting, to Michigan-based Gentex Corp.
(GNTX) for $700 million. Visteon will acquire Johnson Controls'
instrument clusters, infotainment systems, display and body
electronics products.
The two sales fetched a combined $965 million for the auto
electronics business.
Michigan-based Visteon said the purchase will improve its
competitive position in vehicle cockpit electronics by broadening
its manufacturing and engineering footprint, product portfolio and
customer penetration. The acquisition is expected to close in the
second quarter.
Johnson Controls, a large diversified manufacturer in Milwaukee,
has been shedding automotive businesses as part of a strategy to
focus on higher-margin growth businesses. The company announced in
the fall that it was considering options for its automotive
interiors unit.
"There are two potential outcomes" for interiors, said David
Leiker, an analyst for Robert W. Baird & Co. in a note to
investors Monday. "One, is a complete sale to one buyer, most
likely to a Chinese company, or a sale of the unit in pieces."
Johnson Controls continues to make car seating and replacement
batteries for cars, as well as York-brand heating and air
conditioning system. The acquisition is expected to close in the
second quarter.
Johnson Controls shares were recently up 1% at $52.16 a share,
while Visteon is up 3% at $87.56.
Write to Write to Ben Fox Rubin at ben.rubin@wsj.com and Bob
Tita at Robert.Tita@wsj.com
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