Early Tuesday, an announcement was made that CBRE Group (NYSE:CBG) plans to buy Johnson Controls Inc (NYSE:JCI) in a deal valued at $1.475 billion. Johnson Controls’ announced in September that the company planned to split with its Global Workplace Solutions business in an attempt to focus solely on manufacturing.
The all-cash deal will allow CBRE to operate in 55 countries. Currently, Global Workplace Solutions employs nearly 16,000 people. Revenue from GWS reached $3.4 billion in 2014.
A spokesperson from CBRE states that the companies will work together to provide new sources of value to their current customers. Each company will be able to build off of its respective strengths moving forward.
Part of the deal also includes a 10-year strategic partnership. Under the deal, CRBE will provide facilities management for over 50 million square feet of space still controlled by Johnson Controls’. CBRE will be granted permission to buy air conditioning equipment directly from Johnson. The two companies will also partner on an energy-management innovation lab valued at $40 million.
The partnership will help both companies sustain growth.
Investors will want to keep a close eye on the deal. Currently, CBRE Group stock has risen 5.5%, and Johnson Controls’ stock has risen 1.6% on the news.
