Johnson Controls To Spin Off Auto Interiors Unit As Part Of Its Shift Towards Higher Margin Businesses

We figure the company?s decision to spin-off this unit was driven by its extremely low margins. So, even as the divestiture will reduce Johnson Controls?s top line, it will improve its bottom line. In our view, over the long term, margin expansion enabled by this divestiture will improve the company?s valuation as its return on investment will rise with higher margins.
Source: Markets