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Johnson Controls, Grupo IMSA, Varta Announce Joint Ventures

25 September 1998

Johnson Controls, Grupo IMSA, Varta Announce New Battery Joint Ventures

    MILWAUKEE, Sept. 24 -- Johnson Controls, Inc. ,
Grupo IMSA and Varta AG today announced an agreement to form new
joint ventures to manufacture automotive batteries in Mexico and South
America.  Johnson Controls and Grupo IMSA will partner to form a joint venture
in Mexico.  This venture will also include Grupo IMSA's Advantage Battery
subsidiary, which distributes batteries in the U.S. and Canada.  Johnson
Controls, Grupo IMSA and Varta will partner to form a joint venture in South
America.  The joint ventures enable the partners to expand their global
manufacturing, marketing and distribution capabilities to better serve
original equipment and aftermarket automotive battery customers.
    The joint ventures will be formed by contributing the companies' existing
battery businesses in the regions.  The seven battery plants in Mexico,
Brazil, Argentina and Venezuela operated by Grupo IMSA's Enermex subsidiary
will become part of the new joint ventures in Mexico and South America, as
well as Grupo IMSA's Advantage Battery subsidiary.  Johnson Controls will
contribute its battery manufacturing plant in Mexico to form the new Mexican
joint venture with Enermex.   Johnson Controls and Varta will contribute two
plants they operate in Brazil and Argentina through an existing joint venture
to form the new South American joint venture with Enermex.
    In addition, Grupo IMSA will receive a cash payment from Johnson Controls
of approximately $69 million.  The joint ventures will also assume certain
debts of Grupo IMSA and Johnson Controls/Varta.   In total, the joint ventures
will operate 10 manufacturing plants in Mexico and South America.  The joint
ventures are expected to generate sales of US$450 million annually.
    Original equipment battery customers served in those markets include BMW,
Chrysler, Fiat, Ford, Iveco, Mercedes, Nissan, Peugeot, Renault, Toyota, and
Volkswagen.  The companies will also manufacture automotive batteries for a
variety of after-market customers, including major retailers like Carrefour
and Wal-Mart Mexico.
    "This partnership enables us to better support our customers in Mexico and
South America, providing them with the best in technology and the best in
service," said Felipe Muzquiz, Director General of Enermex.
    "By combining our quality processes and technology with Grupo IMSA's
knowledge of the local markets, the joint ventures better support our global
customers and emerging markets," said Keith Wandell, President of the Johnson
Controls battery business.
    "The joint venture will improve our position as a global supplier and we
expect significant synergies in Latin America in all areas, especially
production," added Dr. Georg Prilhofer, responsible member of the Executive
Board of Varta AG.
    Latin American automotive battery markets are growing at over seven
percent annually, and investment plans announced by the world's automakers
suggest that the market expansion will continue.
    The agreements will be finalized following regulatory approvals and
customary closing conditions.
    Grupo IMSA, established in 1936, is a diversified industrial company,
which conducts business in three segments: steel processing products;
batteries and auto parts; and construction and related products.  The company
exported to over 30 countries in 1997 and has manufacturing and distribution
operations in Mexico, the United States, Central and South America.  In 1997,
its revenues reached US$1.5 billion, of which 40% were generated outside
Mexico.  Grupo IMSA is a publicly traded company in the Mexican Stock Exchange
(IMSA) and in the New York Stock Exchange (IMY).
    Johnson Controls, Inc., with headquarters in Milwaukee, Wis., is a global
market leader in automotive systems and building controls.  Through its
Automotive Systems Group, it supplies seating and interior systems, and
batteries.  The Controls Group serves the non-residential buildings market
with control systems and services, and integrated facility management.
Founded in 1885, Johnson Controls operates from more than 500 locations around
the world.  In 1997, its revenues reached US$11 billion, of which 34% were
generated outside the United States.  Johnson Controls holds the leading
market position in the automotive battery market in North America and is the
second largest automotive battery company in the world.
    Varta AG manufactures and markets batteries in a great variety of
electrochemical systems for applications ranging from hearing aids to
commercial vehicles.  It operates 28 production sites in 15 countries with
approximately 12,000 employees.