Johnson Controls to buy York
Milwaukee-based Johnson Controls Inc. has agreed to purchase York International in a $3.2 billion deal that will strengthen Johnson’s position in the U.S. building market.
As a result of the acquisition, Johnson Controls will design and sell integrated controls and HVAC&R equipment; become the largest global provider to the high-margin building services market; and capitalize on significant opportunities to supply products and services to each other’s customers. Both companies intend to capitalize on each other’s strengths. The manufacturing aspect will make Johnson’s controls segment nearly as large as some of its other groups. Johnson can help York leverage the services opportunity, which is different from some of York’s previous transactions.
Johnson Controls will pay $56.50 a share for York stock in an all-cash deal approved by both company’s boards of directors on Aug. 24. York, with estimated sales of nearly $5 billion, will become part of the nearly $6 billion Controls Group of Johnson Controls.
Company officials said the merger would save more than $275 million in costs and contribute “modestly” to earnings per share in the first year. Johnson will assume about $800 million in York debt. Company officials said they believe the transaction will close in December, subject to approval by York shareholders.
For more information, go to www.johnsoncontrols.com