Johnson Controls International Plc said on Tuesday it would sell its power solutions business, which makes car batteries, to investment firm Brookfield Business Partners L.P., in a cash deal valued at $13.2 billion.
The deal will allow Johnson Controls to focus on its building technologies and solutions business, which makes heating, ventilation and air conditioning systems, as well as building access control and fire detection systems.
Reuters reported late last month that Brookfield and Johnson Controls were close to finalizing terms for the sale of the unit, whose batteries are used in about a third of cars globally.
The deal represents the biggest shake-up at Johnson Controls since its merger in 2016 with Tyco International.
Johnson Controls’ power solutions business, which makes and distributes about 154 million lead-acid batteries for passenger cars and light trucks annually, carries higher margins but has been capital intensive for Johnson Controls, analysts have said.
The company expects to deploy $3.0 to $3.5 billion of proceeds towards debt paydown and retain an investment grade credit rating, the company said in a statement.
More deals in the sector are likely, as industrial conglomerates continue to separate businesses that are too disparate in terms of financial performance.
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