German company sells heat pump business to US firm Carrier

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Berlin (AFP) German group Viessmann is selling its “climate solutions” business to Florida-based Carrier Global Corp in a deal worth 12 billion euros ($13.2 billion).

The sale, which the two companies announced late Tuesday, includes heat pump products from Viessmann and comes as Germany lays out plans to phase out gas and oil heating systems as a way to curb global warming. Heat pumps are important to keep Germans out of those systems.

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German Vice Chancellor Robert Habeck, who is leading those plans, said the Viessmann deal showed the heat pump market was “so attractive that it attracts investment”. He said in a statement that the government would study the deal.

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“It is important that the benefits of our energy policy and the profits we generate continue to benefit Germany as a location,” he said. “We will pay attention to this.”

Opposition lawmaker Jens Spahn, in statements to the RND newspaper group, accused the government of ramping up pressure on manufacturers to quickly ramp up production or risk losing market share to Asian competitors.

“Obviously, foreign investors are needed for this,” he said, noting that government policies were leading to “the sale of the German heat pump.”

The deal entails that Carrier pay 80% in cash and 20% in Carrier stock to Viessmann. It will see family-owned Viessmann become one of the largest shareholders in Carrier, in Palm Beach Gardens, Florida. The German company’s CEO, Max Fissmann, will join Carrier’s board of directors upon completion of the transaction, which is expected to happen at the end of the year.

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Carrier, whose business activities include refrigeration, said Weissmann’s Climate Solutions division will provide it with “a distinct and differentiated brand in the highest-growing segment of the global heat pump and energy transition markets.”

The US company’s “global reach, broad product portfolio, financial strength and shared commitment to sustainability” will enable its business to “maximize our impact on Europe’s independent energy transition,” Fisman said.

The German company said that the two sides agreed to exclude layoffs for a period of three years, and to guarantee the future of the main production and research and development sites in the Fissmann division for five years and its headquarters in the central German town of Allendorf for a period of 10 years.

The department employs about 11,000 employees. Weissmann said they will be paid €106m as a one-off bonus marking “106 years of success” once the deal is completed.