CBRE To Buy Johnson Controls' Global WorkPlace Solutions Unit For $1.475 Bln

(RTTNews) - Johnson Controls, Inc. (JCI) said it has reached a definitive agreement for the sale of its Global WorkPlace Solutions or GWS business to commercial real estate services firm, CBRE Group, Inc., for $1.475 billion.

The company announced its intentions to divest the GWS business in September 2014 as part of its strategy to invest in product businesses that are core to its multi-industrial portfolio and growth objectives.

Johnson Controls said the agreement includes a 10-year strategic relationship between the two companies. Johnson Controls will be the preferred provider of HVAC equipment, building automation systems and related services to the 5 billion sq. ft. portfolio of real estate and corporate facilities managed globally by CBRE and GWS.

Johnson Controls noted that the agreement will provide the company with new channels for its offerings and when fully operational is expected to generate up to $500 million of annual incremental revenue for the Johnson Controls Building Efficiency business.

In connection with the agreement, CBRE will also provide Johnson Controls with a full suite of integrated corporate real estate services on more than 50 million sq. ft. of Johnson Controls properties.

In addition, the companies will jointly provide $40 million over 10 years to fund an innovation lab that will develop leading-edge energy management solutions to lower costs and enhance their clients' work environments. The joint innovation lab will evaluate, connect and leverage products, services and energy data to create value for occupiers and investors of real estate.

Johnson Controls noted that it had recently completed the sale of its interests in two GWS-related joint ventures to Brookfield Asset Management, Inc. Including the joint venture transactions, aggregate proceeds from the GWS business divestitures are $1.68 billion.