(Bloomberg) -- Robert Bosch GmbH is emerging as the front-runner to acquire a portfolio of heating and ventilation assets being sold by Johnson Controls International Plc, people with knowledge of the matter said.
The German company is in advanced talks on terms of a potential transaction with Johnson Controls and aims to reach an agreement as soon as the next few weeks, the people said, asking not to be identified because the information is private. A deal could value the operations at several billion dollars, according to the people.
Johnson Controls has been seeking a buyer for the residential and light commercial businesses under its Heating, Ventilation and Air Conditioning (HVAC) division. The assets include most of the York International operations that Johnson acquired in 2005, as well as a 60% stake in an air conditioning joint venture with an arm of Hitachi Ltd. The Japanese firm aims to sell its stake in the joint venture as part of any broader deal, people with knowledge of the matter have said.
Shares of Johnson Controls gained as much as 2.8% on Thursday. They closed down 0.4% to $69.54 in New York, giving the company a market value of about $46.8 billion.
Bosch has been competing against other suitors including industrial group Lennox International Inc. and South Korean appliance maker Samsung Electronics Co., Bloomberg News reported in March. Deliberations are ongoing, and there’s no certainty Bosch will reach an agreement. Other parties remain interested in the assets, and another buyer could still emerge, according to the people.
Representatives for Bosch and Johnson Controls said they don’t comment on rumors or speculation. A spokesperson for Hitachi said the company is considering ways to enhance its corporate value, though no decision has been made at this time.
Johnson Controls has been divesting some assets as it seeks to reposition itself as a pure-play building solutions company. It agreed in June to sell its Air Distribution Technologies business to private equity firm Truelink Capital. The same month, Johnson Controls said it’s creating a Data Center Solutions organization to take advantage of increasing demand for its products in that industry.
--With assistance from Wilfried Eckl-Dorna, Kiel Porter, Crystal Tse, Manuel Baigorri and Tsuyoshi Inajima.
(Updates with closing share price in fourth paragraph.)
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