Hannover, Germany-based Varta and Johnson Controls of Milwaukee, in the US have signed a contract whereby Johnson Controls will acquire Varta's automotive battery division near the end of this year.

The automotive battery division consists of Varta Automotive GmbH and the 80% Varta-majority stake in VB Autobatterie GmbH.

The current 20% stake of Robert Bosch GmbH in VB Autobatterie GmbH will be continued and the value of the transaction amounts to €312.5 million.

The transaction is subject to the approval by the European anti-trust authorities as well as the Varta supervisory board and shareholders.

Varta's automotive battery division reported sales of €590 million for 2001 and about 40% of sales are to the original equipment market and 60% to the aftermarket.

The company supplies all European vehicle manufacturers and also holds a strong position in the European aftermarket.

In a statement Varta said that meeting the increasing requirements of global vehicle manufacturers and to further raise the high performance standards of its manufacturing facilities in Spain, France, Germany, Austria and the Czech Republic it had become necessary to join forces with a strong international partner.

Johnson Controls operates on a global scale in the areas of automotive interior systems and starter batteries as well as facility management and control.

The company, founded in 1885 and headquartered in Milwaukee, reported total sales of $US18.4 billion for 2001 and is the leading supplier of starter batteries to the North and South American markets.

Revenues from automotive batteries amounted to $US1.2 billion in 2001, including  about $US100 million in sales by the German battery manufacturer Hoppecke Automotive which was acquired by Johnson Controls in October 2001.

"Through the combination of Varta and Johnson Controls we create a leading global player in the battery industry. In an environment characterised by ongoing globalisation of our customers and suppliers, this transaction became necessary to secure long-term success'', said Varta chairman Dr. Georg Prilhofer.

"Varta and Johnson Controls fit together well not only because of their complementary geographic presence but also because of similar corporate cultures.''

Varta and Johnson Controls already have a European partnership to supply Ford's original equipment needs and a South American battery joint venture.