Johnson Controls, Hitachi Ltd and Hitachi Appliances Inc have entered into a definitive agreement for their global joint venture while at the World Economic Forum in Davos.

The companies say that the new Johnson Controls-Hitachi joint venture will allow them to deliver the most diverse technology portfolio in the heating, ventilation, air conditioning and refrigeration industry.

Through the agreement, Johnson Controls will obtain a 60 per cent stake in Hitachi Appliances’ global air conditioning business, excluding sales and service operations in Japan, which is worth more than ¥300 billion sales (approximately $2.6 billion).

The joint venture will bring customers a full range of air conditioning products, including world-class variable refrigerant flow (VRF) technology, leading-edge inverter technology based room air conditioners and absorption chillers – on top of existing Johnson Controls products that meet global customer demands.

With approximately 13,800 employees and 24 manufacturing plants, the venture will build on both organisations’ technology, research and development leadership, as well as their expanding marketing channels. The transaction is expected to conclude later this year, subject to regulatory approvals and satisfaction of other customary conditions.

Chairman and chief executive officer of Johnson Controls, Alex Molinaroli, said: “For Johnson Controls, this partnership reflects our strategic commitment to our buildings business as a growth platform. The joint venture will propel us forward with superior products, enabling Johnson Controls to deliver the most diverse technology portfolio in the industry to meet customer demands across the changing global marketplace.”

The joint venture management team will be led by Franz Cerwinka, chief executive officer. He has been with Johnson Controls for almost 20 years, having spent four years in Japan as vice president of finance for the Johnson Controls automotive business, including experience with more than ten joint ventures.

Johnson Controls is a global multi-industrial company with 130 years of history in supplying heating, ventilation, air-conditioning, building controls, refrigeration and security systems for buildings. Through its Building Efficiency business, the company delivers solutions that increase energy efficiency and lower operating costs for over a million customers who are served through nearly 700 offices in more than 150 countries.

Chairman and ceo, Hitachi Ltd, Hiroaki Nakanishi, said: “The worldwide HVAC market is continuing to grow steadily, and the demand for energy efficient air conditioning systems with state-of-the-art technologies is expanding. As air conditioning systems are a key building block for building solutions, we believe this partnership will allow Hitachi and Johnson Controls to deliver the best solutions for our customers. Furthermore, in addition to air conditioning systems, we will be able to provide other building solutions that will enhance efficiencies throughout buildings, as well as surrounding areas.”

A global home appliances and air conditioning solutions provider, Hitachi Appliances, a wholly owned subsidiary of leading global electronics and infrastructure solutions provider Hitachi, Ltd., supplies high quality, efficient and reliable air conditioning solutions across the globe, from residential room air conditioners to variable refrigerant flow systems, and other air conditioning equipment for commercial and industrial use. Hitachi Appliances will continue to provide Hitachi branded HVAC products in the Japanese market after this transaction.