US-based Carrier Global Corporation (Carrier) is to become the air conditioning division of Germany’s Viessmann Group (Viessmann), the market leader in advanced heat pump systems. Under the agreement announced Tuesday night, Carrier will pay €12 billion for the business, which accounts for more than 80 percent of the German family business’s revenue and employs a majority of the Viessmann Group’s 14,500 people.
The U.S. partner will pay 80% of the purchase price in cash and 20% in stock, making the Viessmann family one of Carrier’s largest shareholders.
Federal Economy Minister Robert Habeck said Wednesday that the government is considering the proposed deal and has already contacted the parties. The minister stressed that foreign ownership would be allowed if it served the interests of the German economy.
Viessmann’s business in climate solutions includes the rapid expansion of heat pump production, especially in Germany. The federal government first of all wants to bring about a so-called energy revolution in residential heating based on this environmentally friendly renewable energy technology, which can be used for heating and cooling, i.e. to phase out conventional solutions. The goal is to install at least half a million heat pump systems in the country every year starting in 2024.
As for the large-scale deal planned in an area that the government considers strategically important, the German press emphasized that Viessmann’s sales reach about €4 billion a year, which is not a large sum compared to Carrier’s €12 billion purchase price. At the same time, Carrier expects further rapid growth of the heat pump market. They estimate revenues could triple to €15 billion a year in Europe alone by 2027.
The 106-year-old German family-owned company becomes the most important business in its segment. Although the surge in demand for heat pumps has made it strong and led to very significant developments recently, such as the construction of a heat pump plant in Poland with a €200 million investment, the involvement of an American partner indicates that it is trying to avoid a “futile struggle”, the Frankfurter Allgemeine Zeitung (FAZ) believes.
Viessmann must compete on the heat pump market with the largest Asian manufacturers, which have a huge advantage on the European market due to their size and production capacity. For example, Samsung and LG in South Korea or Midea in China, compared to which the German family-owned company “looks like a dwarf,” the FAZ wrote.
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