Auto Service World
News   August 6, 2002   by Auto Service World

Johnson Controls to Acquire Varta European Battery Business

Johnson Controls, Inc., and Varta AG have announced an agreement whereby Johnson Controls expects to acquire Varta’s Automotive Battery Division, a major European automotive battery manufacturer.
Johnson Controls will pay Euro 312.5 million for Varta’s automotive battery business. The completion of the acquisition, which is anticipated to be slightly accretive to Johnson Controls fiscal 2003 results, is contingent upon receiving customary regulatory approvals.
The transaction is targeted to close near the end of the calendar year. Johnson Controls said that when the acquisition is complete, it expects to have annualized battery sales of approximately US$1.8 billion with a market leadership position in Europe as well as in the Americas.
Varta’s Automotive Battery Division, headquartered in Hannover, Germany, reported fiscal 2001 sales of Euro 590 million and earnings before interest and taxes (EBIT) of Euro 29 million. It operates six battery assembly plants in Europe located in Austria, Czech Republic, France, Germany and Spain. Varta manufactures automotive batteries for BMW, DaimlerChrysler, Ford, PSA, Volkswagen and other automakers in Europe. The company is also a major supplier to the European independent aftermarket, including customers such as Robert Bosch GmbH, hypermarkets such as Carrefour, and wholesalers.
Varta’s research and development efforts include the development of batteries for emerging higher energy, higher power and longer life automotive applications such as dual battery systems, 42-volt electrical systems and battery solutions for hybrid vehicles. The company has programs underway with a number of automakers that focus on lead-acid AGM as well as nickel metal hydride and lithium-ion battery systems.
“Varta’s scale and commitment to technology improvement will enable us to effectively serve the increasing needs of vehicle manufacturers in Europe,” said Keith Wandell, president of the Johnson Controls battery business, “and will position us to serve the global requirements of vehicle manufacturers. In the aftermarket, the well-known Varta brand will help us support our growing aftermarket customers.”
“We are very pleased to join with Varta,” added Giovanni (John) Fiori, Executive Vice President of Johnson Controls and president, International. “Varta is known for quality and proven product and process technology. Together, our companies have many opportunities to exceed the expectations of our customers.”
“Through the combination of Johnson Controls and Varta we create a leading global player in the battery industry. In an environment characterized by ongoing globalization of our customers and suppliers, this transaction became necessary to secure long-term success.” said Dr. Georg Prilhofer, chairman of the executive board of Varta AG. “Johnson Controls and Varta fit together well not only because of their complementary geographic presence but also because of similar corporate cultures.”
Varta and Johnson Controls have been partners in a South American battery joint venture and in fulfilling Ford Motor Company’s original equipment needs in Europe since 1997.

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