Auto parts supplier Johnson Controls, Inc. (JCI) is currently looking to divest its automotive-electronics business unit in bits and pieces as it is not receiving large enough bids for the whole unit, valued at about $1.2 billion. The unit generated sales of $1.4 billion in fiscal 2012.
The Milwaukee, Wisconsin-based company has been in the process of divesting the business unit in order to maximize shareholder value, and had retained JPMorgan Chase & Co. (JPM) in early March to assist in the sale process. The company had put the business unit on the block earlier in the year in order to focus on its high-margin businesses such as car batteries, car seating and the building controls.
Reports suggest that Visteon Corp. (VC) and Huayu Automotive Systems Co, a subsidiary of China's SAIC Motor Corp. are currently the potential bidders in the fray to acquire a part of the business unit.
Delphi Automotive (DLPH) had previously been part of the bidding process, but according to Reuters the U.S. supplier is no longer pursuing a deal.
There are also currently reports of Johnson Controls being in talks with private-equity firms to sell the whole unit for about $1 billion. The company was earlier not interested in including private-equity firms in the sale process as it may then reflect that the company is struggling to sell the unit and may attract smaller bids.
The company had earlier revealed that it is experiencing strong interest from multiple strategic buyers, and the process is ongoing. Meanwhile, some other rival auto-parts suppliers were also interested in acquiring the entire business unit, but their bids came in much lower than expectations.
JCI closed Monday's regular trading session at $37.63, up $0.06 or 0.16% on a volume of 2.93 million shares.
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