Carrier Global Corporation, a Florida-based OEM that specializes in air-conditioning and commercial refrigeration, has announced its acquisition of German heat pump manufacturer Viessmann Climate Solutions (VCS) – the largest segment of the Viessmann Group.
The purchase is valued at €12 billion (US$13.2 billion), subject to working capital and other adjustments, and is expected to be finalized towards the end of 2023. According to several publications, the German government plans to review the proposed agreement.
“The acquisition of Viessmann Climate Solutions is a game-changing opportunity,” said David Gitlin, Chairman and CEO of Carrier.
“The acquisition of Viessmann Climate Solutions is a game-changing opportunity.”David Gitlin, Carrier
Through its acquisition of Viessmann Climate Solutions, which manufactures propane (R290)-based heat pumps for residential and commercial applications, Carrier hopes to accelerate its transformation into a “global leader of intelligent climate and energy transition solutions,” it said.
According to a statement from Viessmann Group, the combination of Carrier’s position in the North American commercial and residential markets, as well as Europe’s commercial sector, and Viessmann’s position in the European residential market will create an “unprecedented market leader” across both continents.
In total, the two companies will generate a revenue of more than €15.5 billion (US$17 billion), which would put it in a strong position to “outperform competition all across the globe,” it added.
Carrier has said this latest acquisition, combined with its Toshiba and Giwee brands in Asia, will help it establish “leadership positions in all attractive segments in all major geographies.”
Europe’s energy transition
“Climate change, sustainability requirements and geopolitical factors are driving an unprecedented energy transition in Europe,” said Gitlin. “Accelerated by government regulations and incentives, the transition creates a significant, long-term growth opportunity.”
With 70% of Viessmann Climate Solutions’ business comprising of heat pumps and related products and services, the company is a critical leader in this movement and is uniquely positioned to “capitalize on this opportunity,” he added.
In an effort to meet climate and energy security goals, European governments are relying heavily on heat pumps. As noted by Carrier, Europe’s €4.5 billion (US$5 billion) heat pump market is projected to grow to €13.6 billion (US$15 billion) by 2027.
Viessmann Group CEO, Max Viessmann – who will be joining Carrier’s board of directors upon completion of the sale – has said that Carrier’s global reach, financial strength and shared commitment to sustainability will enable Viessmann Climate Solutions maximize the impact of its “innovative, integrated solution offering” on the European energy transition.
According to Viessmann Group, its new transatlantic partnership with Carrier highlights the need for international collaboration in the fight against global climate change.
“Strong partnerships have always been fundamental to the success of our family business, and Carrier is a strong partner for our Climate Solutions business,” said Martin Viessmann, Chairman of the Board of Directors at Viessmann Group. “By joining forces, we will be able to uplift our impact on the decarbonization of the building sector to the next level with more reach and scale globally.”
“The world’s energy transition can only be managed successfully if companies think, act and collaborate on a global level,” added Max Viessmann.
“The world’s energy transition can only be managed successfully if companies think, act and collaborate on a global level.”Max Viessmann, Viessmann Group
Benefits for customers and installers
Customers and installation partners of both Viessmann Climate Solutions and Carrier will see a number of benefits from the joining of the two companies, said Viessmann Climate Solutions.
Benefits will include a wider range of products and services, higher production capacities and reduced delivery times.
Job security in Germany
As part of the terms of the acquisition, Viessmann Climate Solutions’ headquarters will remain in Allendorf, Germany, for at least the next 10 years. Other long-term guarantees include “refraining from terminations for operational reasons” for the next three years and “site guarantees for all main manufacturing and R&D locations” for the next five years, explained Viessmann Group.
These guarantees will “secure the long-term future of the business area, leveraging global scale for procurement, logistics, manufacturing, supply chain, product development, sales and services,” it said.
No Viessmann Group activities outside its Climate Solutions business area, including Viessmann Refrigeration Solutions, will be affected by the transaction, and the group will continue to operate as an independent family business, it added.
In addition to buying Viessmann Climate Solutions, Carrier has said it also plans to exit its commercial refrigeration cabinet and fire and safety businesses over the course of 2024 in an effort to “reduce operational complexity and sharpen focus.”