Johnson Controls International PLC is selling its power solutions business, which makes car batteries, to private equity firm Brookfield Business Partners LP for $13.2 billion in cash.
The deal, announced Nov. 13, will allow JCI to focus on its building technologies and solutions unit, which manufactures heating, ventilation and air conditioning systems as well as building management, security and fire safety systems.
Battery cases and covers from the buildings and energy solutions provider are injection molded and made with polypropylene.
Johnson Controls previously said in March it was considering "alternative strategies" for its battery business due to operational opportunities and requirements between the power solutions business and its integrated buildings technology segment.
"The sale of our power solutions business will create value for investors by streamlining our portfolio and giving us increased financial flexibility to strengthen our balance sheet, return capital to shareholders and create optionality in our buildings business," Johnson Controls Chairman and CEO George Oliver said in a statement.
"This focused portfolio will allow us to capitalize on our secular growth trends and to deliver strong financial performance through improved free cash flow conversion, lower capital intensity and continued margin expansion," he said.
After tax and transaction-related expenses, Johnson Controls said it would gain proceeds of $11.4 billion. The company expects to use $3 billion to $3.5 billion of that toward paying down debt. The remainder would be returned to shareholders.
The transaction is expected to close by June 30, 2019.
Johnson Controls, which has global headquarters in Glendale, Wis., produced 154 million lithium-ion and lead-acid batteries for automakers and aftermarket distributors in 2017.
In fiscal 2018, the power solutions business generated sales of $8 billion and a profit of $1.68 billion. The segment employs 15,000 workers who create, manufacture and distribute the advanced batteries.
