Johnson Controls (JCI) Board Approves Adient (ADNT) Separation
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Johnson Controls (NYSE: JCI) announced its board of directors has approved the previously announced spin-off of its global automotive seating and interiors business. The transaction will result in two independent, publicly traded companies: Johnson Controls International plc and Adient plc (NYSE: ADNT). The spin-off is expected to be completed on Oct. 31, 2016.
At the time of the separation, Adient will be the world's largest global automotive seating supplier, supporting all major automakers in differentiating vehicles through superior quality, technology and performance. Johnson Controls will continue to operate as a global leader in building products and technology, integrated solutions and energy storage.
"Today's announcement is an important step as Adient continues on its path toward becoming an independent company," said incoming Adient Chairman and Chief Executive Officer R. Bruce McDonald. "As the market leader in the automotive seating industry, Adient is well-positioned for growth and margin expansion as we commit to reinvesting in the business on a global basis."
The separation will occur by means of the declaration of a dividend in specie of the automotive seating and interiors business, to be effected by the transfer of the automotive seating and interiors business from Johnson Controls to Adient plc and the issuance of ordinary shares of Adient directly to holders of Johnson Controls ordinary shares on a pro rata basis.
The distribution is expected to occur prior to the open of business on Oct. 31, 2016. Each Johnson Controls shareholder will receive one ordinary share of Adient for every 10 ordinary shares of Johnson Controls held as of the close of business on Oct. 19, 2016, the record date for the distribution. No fractional shares of Adient will be issued; Johnson Controls shareholders will receive cash in lieu of fractional shares. No action or payment is required by Johnson Controls shareholders to receive ordinary shares of Adient in the distribution.
Adient ordinary shares are expected to begin trading on the New York Stock Exchange (NYSE) on Oct. 31, 2016 under the symbol "ADNT." The company expects "when-issued" trading for Adient ordinary shares to begin Oct. 17, 2016 and continue through Oct. 28, 2016.
Beginning on Oct. 17, 2016 and continuing through Oct. 28, 2016, it is expected that there will be two markets in Johnson Controls ordinary shares: Johnson Controls shares that trade in the "regular-way" market will trade with an entitlement to Adient ordinary shares to be distributed pursuant to the distribution; shares that trade in the "ex-distribution" market will trade without an entitlement to Adient ordinary shares.
Adient Chairman and Chief Executive Officer R. Bruce McDonald and other members of the Adient executive management team will provide an in-depth review of Adient's business, including Adient's leading market positions, China operations and JV structure, innovative products and technology, financial expectations and FY 2017 outlook on Sept. 15, 2016, in New York City. To participate in the meeting via a live webcast, visit Johnson Controls' Investor Relations website at http://investors.johnsoncontrols.com/.
Johnson Controls shareholders are urged to consult their financial and tax advisors regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling Adient ordinary shares and the applicability and effect of any U.S. federal, state, local, and foreign tax laws. Johnson Controls shareholders who hold Johnson Controls ordinary shares before the distribution date should consult with their stockbroker, bank or other nominee to understand whether their Johnson Controls shares will be sold with or without the entitlement to Adient ordinary shares pursuant to the distribution.
Information regarding Adient and its business, including details of the separation and distribution, is included in Adient's Registration Statement on Form 10, which Adient has filed with the U.S. Securities and Exchange Commission ("SEC") and is available at http://www.sec.gov. The Registration Statement also identifies certain risks of owning Adient ordinary shares.
The separation and distribution of Adient ordinary shares is subject to the satisfaction of a number of customary conditions, including, among others, the SEC's having declared effective the Form 10. Johnson Controls' Board of Directors may cancel the distribution at any time prior to the distribution.
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