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Johnson Controls Inc. (JCI - Analyst Report) recently signed a non-binding memorandum of understanding with Hitachi Ltd. (HTHIY) and Hitachi Appliances, Inc. Under this agreement, Johnson Controls will acquire a 60% ownership stake in Hitachi Appliances' global air conditioning business. However, this transaction excludes the Japanese sales and service operations and some other assets of Hitachi.

The joint venture between Johnson Controls and Hitachi will be operational from 2014, subject to ceratin terms and conditions. This partnership will bring together Johnson Controls’ global market reach and Hitachi's technological proficiency. The products to be produced by the joint venture include variable refrigerant flow (VRF) and inverter technologies for both the commercial and residential markets.

This partnership will help Johnson Controls to become the world's largest commercial air conditioning provider. Hitachi, with its investment in research and development, has evolved as a leading company in the Heating, Ventilating and Air Conditioning (HVAC) industry. This merger will add to the existing technology portfolio of Johnson Controls.

At present, customers prioritize efficient and energy saving air conditioning options, which conform to environment-protective regulations. Thus, the wide range of products offered by these companies will come to the customers' benefit.

Johnson Controls is a supplier of automotive interiors, batteries, and other control equipment. It is the leading supplier of HVAC, building controls, refrigeration and security systems for buildings. It currently holds a Zacks Rank #3 (Hold). Hitachi supplies high quality, efficient and reliable air conditioning solutions worldwide.

Other stocks performing well in the same industry include Tower International, Inc. (TOWR - Snapshot Report) and Gentex Corp. (GNTX - Snapshot Report). Both hold a Zacks Rank #1 (Strong Buy).

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