Johnson Controls Inc. has signed a non-binding letter of intent to acquire Delphi Corporation's global automotive battery business for approximately $212.5 million, subject to adjustments. The business has operations in 10 countries, and generates annual revenues of approximately $600 million. Johnson expects to gain a long-term global contract to supply General Motors with original equipment batteries. The deal is expected to close this summer. It does not include Delphi’s U.S. automotive battery manufacturing locations.
Gregg Sherrill, vice president of Johnson Controls' Automotive Group-Battery, said the acquisition will allow his firm to participate in the rapidly growing Asian automotive battery market, particularly in China. The total vehicle population in China is expected to double in the next five years, with new car production expected to grow at double-digit rates. The business being acquired has a leading position in original equipment batteries in China, as well as a presence in the Chinese aftermarket.
Johnson Controls currently manufactures and distributes more than 80 million batteries annually.