Bosch €7bn bet to dominate home HVAC with biggest ever acquisition
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Bosch is to buy the Johnson Controls-Hitachi Air Conditioning (JCH) joint venture to dominate the global residential heating ventilation and air conditioning (HVAC) market in an €7.4bn ($8bn) deal, its largest ever acquisition.
The $7.4bn deal will see Bosch Home Comfort Group HVAC sales revenue increase from roughly €5bn to €9bn.
Bosch expects the global HVAC market to grow 40 percent by 2030, driven by technological progress, the fight against climate change, and new regulations, particularly with heat pumps replacing domestic boilers for both heating and cooling.
This will make Bosch a major developer and purchaser of power semiconductors as the market moves from silicon IGBTs to gallium nitride (GaN) and silicon carbide (SiC), where Bosch has close relationships with Infineon Technologies. This also boosts the use of AI by Bosch in building management systems.
The deal is expected to close in 12 months.
“As the biggest acquisition in Bosch history, this is an important milestone in the systematic implementation of our strategy for 2030. We are dynamically pushing ahead with the strong development of Bosch, and will achieve a globally leading position in the promising HVAC market with this acquisition,” said says Stefan Hartung, chairman of the board of management of Robert Bosch GmbH.
“In taking this step, moreover, we will strengthen our presence in the U.S. and Asia and achieve a better balance among our business sectors. This is also part of our strategy. In this way, we will open up further growth opportunities and put the company as a whole on a firmer footing,“
The transaction includes 16 manufacturing sites and 12 engineering locations in more than 30 countries. The product portfolio covers the entire spectrum of HVAC solutions for residential and light commercial buildings, and includes well-known brands such as York and Coleman in the US and Hitachi in Asia, for which Bosch will be granted a long-term license.
The new unit will have a workforce of more than 26,000, up from 14,000, and be able to benefit considerably from economies of scale and a complementary portfolio at the interface between heating and cooling.
In the US Bosch expects to see more than 50 percent growth by the end of the decade, and 30% in Europe.
“With this acquisition, Bosch will accelerate its growth and nearly double its sales revenue in the HVAC market to roughly 9 billion euros. Together with our future colleagues, we want to seize the huge opportunities offered by the market for the further growth of this new unit,” said Christian Fischer, deputy chairman of the board of management of Robert Bosch and responsible for the Bosch Group’s strategic growth initiatives, including this deal.
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“The acquired businesses will become part of the Bosch core business – and this will benefit customers, installation partners, and associates,” Fischer adds. “We have proved several times in the past that we can successfully integrate brands, take them forward through investments, and strengthen them.”
“Our leading residential and light commercial business and its world-class team perfectly complement the Bosch portfolio. We are confident that under Bosch’s leadership the business will continue to excel and deliver innovative products and service to its customers. We look forward to seeing their continued success,“
said George Oliver, CEO of Johnson Controls
“The new partnership with Bosch to establish a global air-conditioning business is an important step. The market is dynamic, and is flourishing. I firmly believe that a global supplier such as Bosch, with its strong European presence and many years of experience in the heating business, is the optimum partner for further expanding the global air-conditioning business of the longstanding Hitachi brand,” added Jun Abe, executive officer and executive vice president at Hitachi, and executive officer and general manager of the Hitachi Connective Industries division.
“It is Bosch’s aim to play an active part in shaping the innovative and growing market for energy and building technology, and to occupy a globally leading position. With this acquisition, we are improving our position, especially in air conditioning. In addition, we will be able to globally expand our heat-pump business and achieve greater economies of scale,” said Frank Meyer, the Bosch management board member responsible for the Energy and Building Technology business sector, and thus also for the Bosch Home Comfort Group and the integration of the new unit.
“With our technology and our products, we can work together to make a bigger contribution to energy efficiency and to more comfort and a better quality of life for many people in light of global warming. That’s ‘Invented for life’ in its truest sense.”
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