Johnson Controls has obtained a 60 per cent ownership stake in Hitachi Appliances' global air conditioning business, excluding sales and service operations in Japan.
The companies expect the joint venture to begin operations in 2014, subject to final due diligence and board approvals, definitive agreement on terms, required regulatory approvals and other customary conditions.
Building on the leadership of both companies, the partnership will include key products such as Variable Refrigerant Flow (VRF) and inverter technologies supporting both the commercial and residential markets. The joint venture will combine Johnson Controls' global reach with Hitachi's technology expertise.
Johnson Controls CEO Alex Molinaroli said technology leadership derived from its ongoing investments in research and development have established Hitachi as a key contributor to the global HVAC industry.
"The addition of these capabilities adds key technologies to our product portfolio. Combined with our existing $15 billion building technologies and services business, this investment positions Johnson Controls as the world's largest commercial air conditioning provider.
"This is great news for our customers who will benefit from the full range of solutions, equipment and service that Johnson Controls and Hitachi can offer them on a global scale."
A global multi-industrial company, Johnson Controls is a leading supplier of heating, ventilation, air-conditioning, building controls, refrigeration and security systems for buildings.
Through its Building Efficiency business, the company delivers solutions that increase energy efficiency and lower operating costs for over a million customers who are served through nearly 700 offices in more than 150 countries.
A global home appliances and air conditioning solutions provider, Hitachi Appliances, a wholly owned subsidiary of leading global electronics and infrastructure solutions provider Hitachi, Ltd., supplies high quality, efficient and reliable air conditioning solutions across the globe, from inverter based residential room air conditioners to variable refrigerant flow systems, and other air conditioning equipment for commercial and industrial use.
The proposed joint venture comes at a time when the worldwide air conditioning market is rapidly changing.
Customers are increasingly demanding air conditioning options with better energy efficiency in response to an increase in energy-saving and environmentally-protective regulations.
Hitachi president Hiroaki Nakanishi said both companies have a long and proud history of innovation and growth in the industry with similar values and cultures.
"As the worldwide air conditioning business environment continues to evolve, we believe Johnson Controls and Hitachi's partnership can supply integrated solutions to fulfill the needs of customers around the world," he said.
"Alongside with this joint venture, we look forward to exploring further opportunities to collaborate with Johnson Controls and Hitachi's broad building solution business capitalizing on IT-related technologies."
Meanwhile, a research report released yesterday said the global portable air conditioning system market is set to grow at a CAGR of 12.56 per cent over the period 2013-2018.
One of the key factors contributing to this market growth is the high demand from North America and Europe.
The Global Portable Air Conditioning System market has also been witnessing the increasing adoption of inverter-based portable air conditioners. However, the capital-intensive market could pose a challenge to the growth of this market.
The report, which covers the Asia Pacific, cover key vendors including Carrier Corp., Daikin Industries Ltd., Ingersoll-Rand plc, Johnson Controls Inc., and LG Electronics Inc.
Other vendors mentioned in the report are Airwell Group, Dwyer Instruments Inc., Gree Electric Appliances Inc., Haier Inc., Lennox International Inc., Mitsubishi Electric Corp., Samsung Electronics Co. Ltd., Siemens AG, Toshiba Corp., Voltas Ltd., and Whirlpool Corp.
