German company Viessmann’s decision to sell its heat pump business to US rival Carrier Global Corp has prompted scrutiny from Berlin into a rare sale of a Mittelstand company to a foreign buyer.
Florida-based Carrier has agreed to take over the majority of family-run Viessmann in a €12bn cash-and-stock deal announced late last night, a week after the German government voted to ban most new oil and gas heating systems starting next year.
Carrier said “geopolitical dynamics and [Europe’s] push for energy independence” coupled with “regulations and incentive programmes” was expected to triple the region’s heat pump market to $15bn by 2027.
Robert Habeck, Germany’s economy minister and deputy chancellor, said on Wednesday that the government would review the deal and ensure that German energy policy “and profits generated by it continue to benefit Germany as a business location”.
Habeck said the German government was “in talks with the seller and the investor to ensure that the project serves our economy”.
Berlin’s interest in the sale is a sign of how sensitive energy policy has become following the invasion of Ukraine, which left Germany, which had been highly dependent on Russian gas, scrambling to secure a new energy policy.
Reviews into the sale of German companies to foreign investors have previously tended to focus on areas seen as being of strategic importance, such as robotics, chips or shipyards.
One such example was when Chinese home appliance maker Midea in 2016 bought Kuka in a deal that valued the German robotics maker at €4.6bn.
The deal went through under great scrutiny, with both parties promising the company would remain German. Two years later, chief executive Till Reuter was removed after he disagreed with Midea on the company’s China strategy.
Viessmann said the partnership with Carrier would make it one of the largest shareholders in the US-based company. Its chief executive Max Viessmann, great-grandson of the founder, will be given a place on Carrier’s board.
“The world’s energy transition can only be managed successfully if companies think, act and collaborate on a global level,” he said.
Viessmann, based in a village called Allendorf in the state of Hesse with a population just under 6,000, made €4bn in sales last year and employs 14,500 people. Following the sale of the heat pump business, the remaining company will employ roughly 4,000 people and is expected to generate less than €1bn in sales a year.
The company said Carrier had agreed to maintain the Allendorf headquarters for at least 10 years and to keep all German manufacturing and research and development sites for at least five years. Lay-offs for operational reasons would not take place for at least three years, Viessmann added.
Additional reporting by Olaf Storbeck
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