Johnson Controls on Friday said it had offered Visteon Corporation US$1.25bn in cash for Visteon’s interiors and electronics businesses. The offer is subject to due diligence, the execution of a definitive agreement and the approval of the Johnson Controls board.

“We believe that Visteon’s interiors and electronics businesses would be an excellent strategic fit with our Automotive Experience business,” said Johnson’s chairman and CEO Stephen Roell. “This acquisition would significantly expand our automotive interior technologies and capabilities. It would provide global scale and complementary products to our automotive electronics offerings. Importantly, it would broaden and deepen our global automotive customer relationships.”

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Visteon interiors and electronics businesses are leaders in the fast-growing Chinese automotive interiors industry. Johnson Controls, with 23 joint ventures and 40 manufacturing facilities in China, is the leading provider of automotive seating systems. In China, both Visteon and Johnson Controls do business primarily through non-consolidated joint ventures. With the addition of Visteon’s operations, Johnson Controls Automotive Experience consolidated and non-consolidated revenues in China could exceed an estimated $7bn in 2011.

Visteon’s major customers and Chinese joint venture partner support the transaction, according to Johnson Controls. The company said it believes its offer would provide superior value to Visteon’s stakeholders and that it could move quickly, assuming Visteon’s cooperation. It also said it expects the acquisition would have meaningful cost synergies.

Johnson Controls initially contacted Visteon regarding its interest in the interiors and electronics businesses in January 2010 and made subsequent contacts on 7 and 20 May. No other terms or details of the proposed transaction have been disclosed.

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