Categories Earnings, Industrials

Johnson Controls stock jumps on $13.2-billion divestment

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
An air cooled block (Courtesy: JCI)

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.

 

 

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

Key highlights from Box (BOX) Q4 2021 earnings results

Box Inc. (NYSE: BOX) reported fourth quarter 2021 earnings results today. Revenues rose 8% year-over-year to $198.9 million. GAAP net loss was $4.9 million, or $0.03 per share, compared to

Infographic: Highlights of Hewlett Packard’s (HPE) Q1 2021 earnings report

Technology firm Hewlett Packard Enterprise Company (NYSE: HPE) reported higher earnings for the first quarter of 2021, despite a decrease in revenues. The numbers surpassed the consensus forecast. First-quarter earnings,

MercadoLibre (MELI): Here is a stock to have on your investment radar

MercadoLibre Inc. (NASDAQ: MELI) is one of the stocks that benefited from the COVID-19 pandemic. The Argentine ecommerce company has caught the attention of market experts as it garnered growth

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top