March 31, 2015 / 11:21 AM / 5 years ago

CBRE to buy Johnson Controls' workplace solutions for $1.48 billion

(Reuters) - Johnson Controls Inc (JCI.N), the largest U.S. auto parts maker, said it would sell its business that helps corporates manage their real estate energy needs to real estate services firm CBRE Group Inc CBG.N for $1.48 billion in cash.

Johnson Controls had said in September that it planned to hive of the business to focus on its core automotive operations, which includes making car batteries and interior systems, such as seats and door panels, for automobiles.

The company’s shares rose 1.7 percent premarket on Tuesday,

The global workplace solutions (GWS) business provides facilities management and heating and cooling services for efficient energy use in more than 1.8 billion square feet of corporate real estate.

CBRE, the world’s largest commercial real estate services firm, had prevailed in an auction for the business that attracted several private equity firms, Reuters reported earlier in March.

The deal also makes Johnson Controls the preferred provider, for a 10-year period, of heating and cooling systems for the 5 billion square feet of real estate and corporate facilities that CBRE and GWS will manage.

When fully operational, that deal would add about $500 million to Johnson Controls’ annual revenue, the company said.

CBRE in turn will provide Johnson Controls with its suite of real estate services, including brokerage, commercial mortgage origination and servicing, as well as facilities management.

CBRE said it expects the deal to add to adjusted earnings in 2016.

BofA Merrill Lynch is Johnson Controls’ financial adviser and Wachtell, Lipton, Rosen & Katz serving is its legal adviser. Simpson Thacher & Bartlett LLP is CBRE’s legal adviser.

Reporting by Rohit T. K. in Bengaluru; Editing by Savio D'Souza

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