Johnson Controls International Plc (JCI) saw its stock jump on Nov 14 after it announced it would sell its car battery making unit to an investment firm for $13.2 billion in cash.
Before the market opened, the shares moved 3.5% up in premarket trade. The stock then shot up as high as 4.5% to $35.74 in Tuesday trade, from Monday’s close of $34.18.
The power solutions business would go to Brookfield Business Partners L.P. in a cash deal that is expected to close by June 30, 2019.
Investors seem to like the notion that Johnson Controls looks to focus on its tech and solutions business which deals with ventilation, heating and A/C systems, along with fire detection services and building access controls.
![JCI stock jumps on $13.2 billion deal](https://news.alphastreet.com/wp-content/uploads/2018/11/jci-PR-IMG_2562-Air-cooled-block-1024x683.jpg)
Batteries made by the Johnson unit are used in almost 30% of all cars worldwide, and this deal represents a significant change since the company merged with Tyco International in 2016.
While the battery unit did carry higher margins, it was not conducive to the capital, according to analysts. About $3 billion or a little more from the deal proceeds would be used to pay debt and help retain a credit rating, according to the company.
The deal falls in line with bog companies selling off units that are weighing down on them financially.
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