Johnson Controls offers $1.25 billion for interiors and electronics business at Visteon

Johnson Controls offers $1.25B for Visteon unit

Johnson Controls Inc. has offered $1.25 billion for the automotive interiors and electronics business at Visteon Corp., saying the acquisition would expand its presence in China.

Visteon, however, was skeptical of the bid, saying that it was vague and missing important details. The auto parts company also suggested that Johnson Controls, a direct competitor, might be using the offer as a way to drag out Visteon’s Chapter 11 bankruptcy reorganization.

Johnson Controls, which builds car interiors, batteries and other components, said Friday it sent a letter to Visteon expressing interest in the acquisition.

“This acquisition would significantly expand our automotive interior technologies and capabilities,” Johnson Controls CEO Stephen Roell said in a statement. “Importantly, it would broaden and deepen our global automotive customer relationships.”

Visteon acknowledged that it had received the unsolicited offer and that it has sought more information from Johnson in a May 17 letter. The auto parts supplier said the bid was “remains highly conditional and vaguely defined,” though it did not specify what information was lacking from the proposal.

“It is unclear at this point whether this proposal holds out any real prospect of enhancing value to Visteon’s constituents,” the company wrote in a statement.

Johnson Controls, headquartered in Milwaukee, said the acquisition would be a good fit within its automotive parts business. It would also give it a bigger foothold in China, where Visteon is a key a player and where Johnson Controls has 23 joint ventures and 40 manufacturing facilities.

If its bid is successful, Johnson Controls projected that revenue from its auto parts business in China could exceed $7 billion in 2011.

Johnson Controls said it first approached Visteon about buying its interiors and electronics business in January and again on May 7.

The company said it has retained the law firm Wachtell, Lipton, Rosen & Katz as well as JPMorgan Securities to help with its bid.

Visteon filed for bankruptcy protection in May 2009, as automakers were slashing production and shuttering factories to cope with reduced demand for new vehicles. Automakers General Motors and Chrysler themselves filed for bankruptcy protection months later.

In April, Visteon posted first-quarter net income of $233 million, sharply improved form the prior-year period. Last week, the judge presiding over its bankruptcy granted the company more time to win support for its reorganization plan.

In its response, Visteon noted that it was at a “critical point” in its bankruptcy proceedings, and that Johnson Controls would benefit by “introducing delay and complexity” into its reorganization. Visteon said it had difficult experiences with Johnson Controls in past deals.

“Exploring a transaction of this size and scope at this time could distract the company from its primary objective of completing the ongoing reorganization process,” Visteon said it its statement.

Shares of Johnson Controls rose 45 cents, or 1.6 percent, to $28.13 in afternoon trading Friday.

AP Business Writer Stephen Manning in Washington contributed to this story.