HOLLAND — Johnson Controls International plc is reviewing whether it should sell or spin off its battery division to focus on its main HVAC and building electronics business, company officials said this week.
The global automotive supplier will take several months to finalize its optimization plan to assess its power solutions business, which includes a plant in Holland that makes advanced lithium-ion batteries as well as operations elsewhere that make traditional lead-acid batteries. The business generated about $7.3 billion in revenue in the fiscal year that ended Sept. 30, 2017.
“Given the differing dynamics of the platforms, we are evaluating strategic alternatives for Power Solutions,” Chairman and CEO George Oliver said in a statement Monday. “Over the years, our team has built Power Solutions into an incredible business with a high-margin aftermarket model that has delivered consistent growth through business cycles. These strong fundamentals, as well as recently issued provisions of U.S. Tax Reform, will be taken into account as we review the alternatives and assess which option creates the best long-term results for the business and the most value for shareholders.”
Oliver said the move comes as the company is focusing on shareholder value, improving operational execution and “optimizing the business portfolio.”
“(Monday’s) announcement also reflects our strategic priority to strengthen and invest in our global market-leading positions in HVAC, fire and security solutions and integrated building management systems, which operate in attractive vertical markets with strong growth prospects.”
There is no word on what the assessment could mean for JCI’s Meadowbrook plant, which makes lithium-ion batteries for hybrid vehicles.
The company didn’t respond to a request to comment as this story went to press, but in a separate release noted that it “does not intend to make any further public statements until a specific determination has been made.”
According to a report in the Milwaukee Journal-Sentinel, the battery business could fetch roughly $17 billion for JCI.
JCI spun off its automotive seating business as Adient Inc. (NYSE: ADNT) in 2016 and its interiors business to the China-based Yanfeng Automotive Interiors in 2015.