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Johnson Controls and Hitachi Announce Global Air Conditioning Joint Venture

December 3, 2013

Johnson Controls together with new joint venture will create world's largest commercial air conditioning provider

MILWAUKEE and TOKYO - Today Johnson Controls, Inc., Hitachi, Ltd. and Hitachi Appliances, Inc. (collectively referred to as Hitachi) announced that the companies have signed a non-binding memorandum of understanding for a transaction in which Johnson Controls will obtain a 60% ownership stake in Hitachi Appliances' global air conditioning business, excluding sales and service operations in Japan and certain other assets. The companies expect the joint venture to begin operations in 2014, subject to final due diligence and board approvals, definitive agreement on terms, required regulatory approvals and other customary conditions.

Building on the leadership of both companies, the partnership will include key products such as variable refrigerant flow (VRF) and inverter technologies supporting both the commercial and residential markets. The joint venture will combine Johnson Controls' global reach with Hitachi's technology expertise.

"Technology leadership derived from its ongoing investments in research and development have established Hitachi as a key contributor to the global HVAC industry," said Alex Molinaroli, president and chief executive officer, Johnson Controls. "The addition of these capabilities adds key technologies to our product portfolio. Combined with our existing $15 billion building technologies and services business, this investment positions Johnson Controls as the world's largest commercial air conditioning provider."

A global multi-industrial company, Johnson Controls is a leading supplier of heating, ventilation, air-conditioning, building controls, refrigeration and security systems for buildings. Through its Building Efficiency business, the company delivers solutions that increase energy efficiency and lower operating costs for over a million customers who are served through nearly 700 offices in more than 150 countries.

A global home appliances and air conditioning solutions provider, Hitachi Appliances, a wholly owned subsidiary of leading global electronics and infrastructure solutions provider Hitachi, Ltd., supplies high quality, efficient and reliable air conditioning solutions across the globe, from inverter based residential room air conditioners to variable refrigerant flow systems, and other air conditioning equipment for commercial and industrial use.

The proposed joint venture comes at a time when the worldwide air conditioning market is rapidly changing. Customers are increasingly demanding air conditioning options with better energy efficiency in response to an increase in energy-saving and environmentally-protective regulations.

"Both companies have a long and proud history of innovation and growth in the industry with similar values and cultures," said Hiroaki Nakanishi, President of Hitachi, Ltd. "As the worldwide air conditioning business environment continues to evolve, we believe Johnson Controls and Hitachi's partnership can supply integrated solutions to fulfill the needs of customers around the world."

"This is great news for our customers who will benefit from the full range of solutions, equipment and service that Johnson Controls and Hitachi can offer them on a global scale," said Molinaroli.

Hiroaki Nakanishi also said, "Alongside with this joint venture, we look forward to exploring further opportunities to collaborate with Johnson Controls and Hitachi's broad building solution business capitalizing on IT-related technologies."

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