The sale or purchase of a business requires careful negotiations and planning. The transaction does not have to end or even reduce operations, but sometimes a restructuring based on financial analysis is necessary. In these cases, it is important that the parties to the transaction have legal support to analyze financial statements and prepare business agreements. Employment agreements are also a factor, and legal guidance can help defend against disputes in the event that changing the business structure impacts employees.
These are all issues that will have to be addressed after the recent announcement that Johnson Controls Inc. will likely sell its automotive interiors business in West Michigan. That division of the corporation operates a number of manufacturing facilities in the Holland area.
According to JCI, about 3,400 workers are employed in Holland-area factories, which manufacture a range of products, including automotive electronics and interiors.
The interiors division is based in Plymouth, and it was reported that in fiscal 2013 the division recorded sales of $4.2 billion and losses of $13 million.
This past spring, JCI also announced the sale of its automotive electronics division, and that sale is expected to bring a price of roughly $1 billion. Just recently, JCI also reportedly gained about $257 million after selling its HomeLink division.
It is possible that the purchaser of the Holland-area business is able grow the business in ways that JCI couldn’t. In any case, a major transition such as this one is bound to present challenges and risks. Michigan residents will undoubtedly want to follow the sale as it moves forward.
Source: mlive.com, “One of Holland’s largest employers put on the block, may change hands,” Jim Harger, Oct. 29, 2013
