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Johnson Controls Acquires York
Aug 25, 2005
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Johnson Controls, Inc. and York International Corporation announced on Aug. 25, in a teleconference attended by APPLIANCE magazine, that Johnson Controls will acquire York, a global supplier of heating, ventilating, air-conditioning and refrigeration (HVAC/R) equipment and services.

York, with estimated sales of nearly U.S. $5 billion, will become part of the nearly $6 billion Controls Group of Johnson Controls.

The combination of the Controls Group and York is expected to increase Johnson Controls rate of growth in the $200 billion industry for global building environments. Johnson Controls fiscal 2005 consolidated sales from continuing operations, including its automotive seating/interiors and battery businesses, are forecast at nearly $28 billion.

Under the definitive agreement unanimously approved by the boards of directors of both companies, Johnson Controls will acquire York in an all-cash transaction in which York shareholders will receive $56.50 for each outstanding share of York common stock. The total value of the acquisition is anticipated to be approximately $3.2 billion, including the assumption of approximately $800 million of York debt.

As a result of the combination, 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.

In addition, Johnson Controls global market reach will be enhanced, as the businesses collectively serve customers from more than 500 sales and service offices and reach more than 125 countries. The two companies are market leaders in North America and Europe, and have complementary operations in the faster growing regions of Asia, Central Europe, the Middle East, and Latin America.

Johnson Controls anticipates the transaction will close in December 2005, subject to customary closing conditions that include regulatory approvals and York shareholder approval. York's board of directors has unanimously recommended that York shareholders vote in favor of the transaction at a shareholders meeting that will be scheduled as soon as practicable.

"This is really a whole new chapter for both companies as we acquire York International, the largest independent supplier to the global heating/cooling market," said John Kennedy, president of Controls Group, Johnson Controls. "It nearly doubles our size in the building environment industry and it takes our access to our $200 billion global market from roughly looking and addressing about 30 percent, to addressing over 100 percent of the major categories in that market."

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