Nun it’s official: The traditional Hessian company Viessmann is being sold for the most part. It is acquired by the American air conditioning specialist Carrier. The two companies announced the transaction on Tuesday evening. Corresponding reports about a possible sale were thus confirmed very quickly.
Carrier takes over the air conditioning solutions division from Viessmann, which accounts for more than 80 percent of total sales and in which 11,000 of the 14,500 employees work. The Americans pay 12 billion euros to the Viessmann family, 80 percent of which is in cash and the rest in treasury shares. According to their own statements, the Viessmanns will be among the largest Carrier shareholders in the future. Max Viessmann, the CEO of the German company, is to have a seat on Carrier’s board of directors. The transaction is expected to close towards the end of this year.
The division that is now being sold includes the recently strong growth business with heat pumps. Overall, Carrier expects sales of 4 billion euros for the acquired Viessmann activities this year. The Americans predict rapid growth, especially in the market for heat pumps. In Europe, it currently stands for annual sales of $5 billion, and is expected to triple to $15 billion by 2027.
Sale at the peak of success
According to its own statement, the Viessmann Group will keep businesses with annual sales of one billion euros, some of which have not yet been consolidated. These include, for example, cooling technology, investment companies, real estate and family foundations. As a signal that the transaction with Carrier should not mean the end of Viessmann, the company has now announced ambitious plans for these remaining activities. It is the “clear objective and ambition” to grow to a size by the end of the decade at the latest that will surpass today’s business with climate solutions. The proceeds from the sale to Carrier are “largely” to be reinvested in the Viessmann Group, it said.
Max Viessmann said the merger with Carrier will create “a future-proof global climate champion”. The transaction is happening “from a position of strength”. In fact, Viessmann is by no means an ailing company. On the contrary, it is experiencing the most successful phase in its more than 100-year history, driven in part by the great demand for heat pumps. Sales rose last year by 19 percent to a record high.
The North Hessians have also announced a one-off investment of one billion euros in company history in order to serve the politically fueled demand for heat pumps. More than 200 million euros should flow into a new plant in Poland alone.
However, this supposed strength hasn’t stopped the Viessmanns from avoiding a fight that they consider hopeless. According to this reading, the family is concerned with rescuing Viessmann, not giving up their life’s work. Apparently, the Germans no longer see themselves in a position to withstand the large Asian manufacturers, who will increasingly attack the local market for heat pumps. There are companies from China, Korea or Japan that are pushing into the German and European market with immense advantages due to their size and the enormous quantities they produce. Among them is Samsung, the Korean conglomerate, compared to which Viessmann looks like a dwarf. The same goes for LG, also from Korea. Or for Midea from China, which became known in this country through the controversial takeover of the robot manufacturer Kuka from Augsburg.
According to Viessmann, it has agreed “long-term guarantees” with Carrier. Operational redundancies are excluded for three years, there will be a five-year guarantee for the most important production, research and development locations and for ten years for the headquarters in Allendorf.
106 million bonus for 106 years of Viessmann
A one-time bonus totaling 106 million euros is to be paid to the employees of the division, which is now to be sold to Carrier, for the 106 years of Viessmann’s existence.
Carrier, the future owner of Viessmann’s core business, has only been an independent company for a few years. The air conditioning specialist was long part of the United Technologies conglomerate, which then split up in 2020. Carrier and elevator specialist Otis became independent, while United Technologies retained its aerospace and defense business, merged it with competitor Raytheon and has operated under its name ever since. Carrier posted sales of $20.4 billion and net income of $3.5 billion last year, and the company is valued at around $35 billion on the stock market.
The takeover of Viessmann is part of a broader corporate restructuring. Last year, Carrier took over the majority of a former joint venture with the Japanese Toshiba group, which also produces heat pumps, among other things. Along with the Viessmann acquisition, Carrier also announced on Tuesday that it was exiting the fire protection and security products business.