Carrier Global Corp., the US maker of air conditioners, agreed to acquire most of German family-owned manufacturing company Viessmann for €12 billion ($13.2 billion) to bolster its heating and cooling operations.
(Bloomberg) — Carrier Global Corp., the US maker of air conditioners, agreed to acquire most of German family-owned manufacturing company Viessmann for €12 billion ($13.2 billion) to bolster its heating and cooling operations.
The US firm is paying 80% of the purchase price in cash and 20% in stock for Viessmann’s climate solutions unit, according to a statement Tuesday. The unit accounts for 85% of Viessmann’s revenue.
“The acquisition of Viessmann Climate Solutions is a game-changing opportunity,” Carrier Chairman and Chief Executive Officer David Gitlin said in the statement. “Climate change, sustainability requirements and geopolitical factors are driving an unprecedented energy transition in Europe.”
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 acquisition is part of a broader transformation at Carrier. The firm is forging its own path as a standalone company after separating in 2020 from United Technologies Corp., which also split with the Otis elevator business, merged with Raytheon and was renamed Raytheon Technologies Corp.
Carrier said in its statement that 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.
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.
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.
It also marks a rare example of the purchase of a so-called Mittelstand company, the small-and-midsize companies that are the backbone of the German economy.
(Updates with further details in sixth paragraph)
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