Tokyo, Japan – Orrick, Herrington & Sutcliffe LLP has advised US-based Johnson Controls, Inc. in connection with its entering into a definitive agreement with Hitachi, Ltd. and Hitachi Appliances, Inc., to form a global HVAC (heating, ventilating, and air conditioning) joint venture Through the agreement, Johnson Controls will obtain a 60 percent ownership stake in Hitachi Appliances’ global HVAC business, which has more than JPY 3,000 billion (USD 2.6 billion) in annual sales. Subject to regulatory approvals and satisfaction of other customary conditions, the transaction is expected to close later this year.
With approximately 13,800 employees and 24 manufacturing plants around the world, the joint venture will build on the technology know-how, research and development leadership of both companies, as well as their expanding marketing channels.
The cross-border Orrick team was led by L. Mark Weeks, Managing Partner of Orrick’s Tokyo office, and Edward “Ted” Johnson, Partner of Orrick’s Tokyo M&A and Private Equity group, and included lawyers from Orrick’s M&A, employment, environment, acquisition finance, intellectual property and international trade & compliance practices.
“This transaction will have a significant impact on the HVAC market worldwide,” said Mr. Weeks. “In response to increased demands in energy-saving and environmentally-protective regulations, customers are demanding air conditioning options with better energy efficiency. The joint venture will allow Johnson Controls to deliver the most diverse technology portfolio in the industry to meet their customers’ demands.”
Mr. Johnson added, “We are delighted to be working on this groundbreaking transaction for our client. The transaction has involved Orrick attorneys from multiple practice areas across seven countries and ten offices, as well as managing outside counsel in six additional countries. This illustrates the depth and breadth of global platform and capability of handling the most complex global transactions.