03:36 PM EDT, 07/23/2024 (MT Newswires) -- Johnson Controls International ( JCI ) said Tuesday it has agreed to sell its residential and light commercial heating, ventilation and air-conditioning business as it pushes ahead with efforts to become into a pure-play solutions provider for commercial buildings.

The building products company is selling the HVAC business to German technology group Bosch. Johnson Controls International ( JCI ) said the deal includes the North America Ducted business and its 60/40 global residential joint venture with Japanese group Hitachi. The total transaction is valued at $8.1 billion, with Johnson Controls' ( JCI ) portion of the consideration being $6.7 billion.

The HVAC business generated roughly $4.5 billion in revenue in fiscal 2023, according to a statement. The unit makes ducted and ductless HVAC equipment and components globally for both residential and light commercial applications.

"We are pleased to have reached this pivotal milestone, which accelerates our transformation and positions Johnson Controls ( JCI ) as a simpler, higher-growth company," Chief Executive George Oliver said. "We believe Johnson Controls ( JCI ) is well-positioned for its next phase of growth to deliver enhanced, long-term value to shareholders."

The company's shares were down 1.3% in Tuesday late-afternoon trade.

Johnson Controls ( JCI ) expects the deal to be accretive to profit margins adjusted for the impact of equity income, while net cash proceeds to the company are pegged at nearly $5 billion. Hitachi will retain certain ductless HVAC assets in Shimizu, Japan, as part of the deal, Johnson Controls ( JCI ) said.

"Together with our future colleagues in the acquired business, we want to seize the huge opportunities offered by the market for the further growth of this new unit," Robert Bosch Deputy Chairman Christian Fischer said.

Johnson Controls ( JCI ) said it expects to use the sale proceeds to pay down debt to to maintain its investment-grade rating, with the remaining proceeds to be returned to shareholders.

The deal is expected to close in about 12 months, subject to regulatory approvals and other conditions.

Johnson Controls ( JCI ) said it expects its fiscal third-quarter adjusted earnings to be "slightly ahead" of its previously outlined range of $1.05 to $1.10 per share. The company is scheduled to report results July 31.

Price: 69.32, Change: -0.88, Percent Change: -1.25