Johnson Controls To Explore Strategic Options For Automotive Business

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) said Wednesday that it is exploring strategic options for the separation of its automotive business.

The Milwaukee, Wisconsin-based company added that it has no specific timetable for the completion of the strategic review, which includes a full range of strategic options for the automotive business.

The automotive business, which makes interiors and seatings for vehicles, generated over half of the company's net sales in fiscal 2014. The company's other business segments are the Building Efficiency segment and the Power Solutions segment.

Further, the company said it is continuing to actively evaluate growth platforms that are aligned with the operational capabilities and specific attributes of its multi-industrial portfolio.

Johnson Controls has engaged Goldman Sachs and Centerview Partners to serve as its financial advisors, and Wachtell, Lipton, Rosen and Katz to serve as its legal advisor in connection with the strategic review.

Alex Molinaroli, chairman and CEO of Johnson Controls said, "Today's announcement continues our strategy of proactive portfolio management to drive focus on strategic product-oriented businesses where we can be a global market leader, drive more profitable growth and deliver maximum long-term value for our customers and shareholders."

Johnson Controls said that the Johnson Controls Operating System or JCOS, a wide-ranging overhaul, provides an operational vehicle to create value through systemic application of strategic capabilities across the company.

The company noted that as discussed at its analyst meeting in December 2014, the JCOS is already delivering results and is expected to yield $2 billion in incremental segment income by 2020 through operational effectiveness and increased speed to market.

Molinaroli has been pushing for rapid changes in the more than one year that he has been at the helm. Molinaroli is reportedly seeking to rely less on the auto industry and invest to expand the company's other two segments.

Johnson Controls bought Air Distribution Technologies of Texas for $1.6 billion in June 2014, and earlier this year said it signed an agreement with Japan's Hitachi Ltd (HTHIF.PK, HTHIY.PK) to form a joint venture for variable refrigerant flow and air-conditioning.

The company has also divested its automotive electronics business and conducted a major restructuring of the building efficiency business.

JCI closed Tuesday's trading at $51.56. In Wednesday's pre-market activity, the stock is adding $2.12 or 4.11 percent to $53.68.