Sign in Subscribe
Transportation equipment industry

European Commission Clears Johnson Controls' Acquisition of Delphi's Battery Business

Strategic Insights

— 1 min read

The European Commission has given its approval for US-based Johnson Controls to acquire the car battery business of Delphi Corp, a German car parts maker. In a statement, the Commission said it had examined the market for car batteries and found that there is overcapacity and increasing competition from suppliers. Johnson Controls has agreed to acquire the battery business for approximately $212.5 million and expects to receive a long-term contract to supply original equipment batteries to General Motors. The deal is expected to close this summer and will allow Johnson Controls to expand its presence in the Asian battery market.

Key Takeaways:

  • The European Commission has cleared Johnson Controls' acquisition of Delphi's car battery business for approximately $212.5 million.
  • Delphi's battery business has annual sales of about $600 million, with a strong position in China's original equipment batteries market.
  • Johnson Controls expects to receive a long-term contract to supply original equipment batteries to General Motors.
  • The deal is expected to close this summer and will allow Johnson Controls to expand its presence in the Asian battery market.
  • The acquired business has a strong position in the rapidly-growing Asian battery market, with increasing competition from suppliers such as Exide Technologies and FIAMM S.P.A.
  • Johnson Controls produces building control systems, automotive systems, and automotive batteries, and had 2004 sales of $27.63 billion.
  • The company owns 80% of Varta's Automotive Battery Division in Germany, which was acquired in 2003 for EUR312.5 million.
  • Robert Bosch GmbH holds the remaining 20% of Varta's Automotive Battery Division.

Statistics:

  • The acquisition price is approximately $212.5 million.
  • Delphi's battery business has annual sales of about $600 million.
  • Johnson Controls had 2004 sales of $27.63 billion.
  • The acquired business operates in the rapidly-growing Asian battery market.
  • Varta's Automotive Battery Division was acquired by Johnson Controls in 2003 for EUR312.5 million.

Sources:

  • Dow Jones Commodities News (Jun 30, 2005)
  • Comtex News (http://www.comtexnews.com)
  • Johnson Controls Inc. (JCI)
  • Delphi Corp. (DPH)
  • Exide Technologies (XIDE)
  • FIAMM S.P.A. (FMM.YY)

Read more