Germany vowed to look into Carrier Global Corp.’s planned €12 billion ($13.2 billion) acquisition of most of family-owned manufacturer Viessmann as Europe’s biggest economy tries to safeguard green-technology jobs.
(Bloomberg) — Germany vowed to look into Carrier Global Corp.’s planned €12 billion ($13.2 billion) acquisition of most of family-owned manufacturer Viessmann as Europe’s biggest economy tries to safeguard green-technology jobs.
The US maker of air conditioners agreed to pay 80% of the purchase price in cash and the remainder in stock for Viessmann’s heating and cooling unit, which accounts for 85% of the group’s revenue. Berlin said Wednesday it’s in talks with both parties over the deal.
“It is important that the benefits of our energy policy, and profits generated by it, continue to benefit Germany as a business location,” Economy Minister Robert Habeck said in a statement. “We will pay attention to this.”
Viessmann is a leading manufacturer of heat pumps, a key element of Germany’s efforts to cut greenhouse gas emissions from home heating and cooling. For Carrier, the purchase promises growth in the lucrative European market and accelerates its transformation into a standalone company after the manufacturer separated from United Technologies Corp. in 2020.
“Climate change, sustainability requirements and geopolitical factors are driving an unprecedented energy transition in Europe,” Carrier Chairman and Chief Executive Officer David Gitlin said in a statement.
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The deal marks a rare example of the purchase of a so-called Mittelstand firm, the small-and-midsize companies that form the backbone of the German economy. Viessmann, which employs around 14,500 and generated €4 billion in revenue last year, competes with local peers Vaillant and Robert Bosch GmbH’s Buderus.
Carrier said it plans to exit its fire and security and commercial refrigeration cabinet businesses during 2024 in order to focus on “intelligent climate and energy solutions.”
The company said it also expects to maintain its investment grade credit rating at the close of the Viessmann acquisition and return to its pre-transaction leverage profile within about two years.
Carrier’s shares fell 7.3% on April 24 in New York when news of the potential deal came out. The shares have gained 2.6% this year, valuing the Florida-based company at about $35 billion. After falling as much as 6% following the announcement and the close of regular trading on Tuesday, Carrier’s stock was last trading at about 1.5% below its closing price.
The takeover brings a welcome boost to German dealmaking activity. The value of mergers and acquisitions in the country is down about 55% this year to $9.1 billion, according to data compiled by Bloomberg.
Viessmann, founded more than a century ago by former factory worker Johann Viessmann, makes heat pumps, boilers and heating systems. It’s now run by the fourth generation of the Viessmann family, according to its website. Outside of its core climate solutions business, which provides heating, cooling, ventilation, energy generation and energy storage products, the firm also has a small refrigeration business.
–With assistance from Iain Rogers.
(Updates with comment from economy minister in third paragraph.)
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