Summary
Johnson Controls International plc (JCI) announced on March 15, 2019, that a German subsidiary received a complaint from Robert Bosch GmbH concerning a joint venture related to automotive starter batteries. The complaint alleges that certain internal JCI reorganization transactions were not compliant with the joint venture arrangements and seeks a declaration that these transactions are void or, alternatively, damages. JCI disputes these claims, believing it has strong defenses and that any potential damages are likely immaterial to its business and financial condition. This disclosure is made due to the concurrent release of similar information in an offering memorandum for debt financing related to JCI's previously announced sale of its Power Solutions business. Importantly, JCI has agreed to indemnify the purchaser for any damages arising from this litigation, and the proceeding does not impact the sale price of the Power Solutions business, which is expected to close by June 30, 2019, subject to customary conditions and regulatory approvals.
Key Highlights
- 1Robert Bosch GmbH filed a complaint against a JCI German subsidiary regarding a joint venture in automotive starter batteries.
- 2The complaint alleges non-compliance with joint venture arrangements due to internal JCI reorganization transactions.
- 3JCI believes it has strong defenses and disputes the merit and valuation claims made in the complaint.
- 4JCI anticipates any potential liability from this litigation would be immaterial to its financial condition and results of operations.
- 5JCI has agreed to indemnify the buyer of its Power Solutions business for any damages related to this joint venture litigation.
- 6The lawsuit does not affect the sale price of the Power Solutions business.
- 7The sale of the Power Solutions business remains on track to close by June 30, 2019, pending customary conditions and regulatory approvals.