Johnson Controls to sell Global WorkPlace Solutions for almost $1.5 billion

Freeman Staff

March 31, 2015

MILWAUKEE — Johnson Controls, Inc. announced Tuesday that it will sell its Global WorkPlace Solutions business to CBRE Group, Inc., for $1.475 billion.

According to the announcement, Johnson Controls expressed its plan to divest the GWS business in September 2014 as part of its strategy to invest in product businesses that are core to its multi-industrial portfolio and growth objectives.

The agreement between Johnson Controls and CBRE includes a 10-year strategic relationship between the two companies with Johnson Controls named the preferred provider of HVAC equipment, building automation systems and related services to the 5 billion-square-foot portfolio of real estate and corporate facilities managed globally by CBRE and GWS. The agreement is expected to generate up to $500 million of annual incremental revenue for the Johnson Controls Building Efficiency business, according to the announcement.

“This agreement with CBRE is a great step for both companies that will allow each of us to build upon our core strengths to create new sources of value for our customers. GWS is a natural fit with CBRE's offerings, and together they will strategically take the business forward,” said Alex Molinaroli, chairman and CEO of Johnson Controls, in a statement. “In addition, the new strategic partnership provides another new, strong channel for Johnson Controls to serve CBRE and its clients around the world with our full portfolio of buildings technologies and services.”

As part of the agreement, CBRE will provide Johnson Controls with a full suite of integrated corporate real estate services for more than 50 million square feet of Johnson Controls properties. In addition, the companies will jointly provide $40 million during 10 years to fund an innovation lab that will develop leading-edge energy management solutions to lower costs and enhance their clients' work environments.

Johnson Controls recently completed the sale of its interests in two GWS-related joint ventures to Brookfield Asset Management, Inc. Including the joint venture transactions, aggregate proceeds from the GWS business divestitures are $1.675 billion.