Last week, Carrier Global Corp announced a €12bn deal to buy the largest segment of family-owned Viessmann Group – a move that has caused concern among Germany’s real estate community that faces a new law in 2024 forcing the use of products such as heat pumps in properties.
The boards of Florida-based Carrier and Allendorf-headquartered Viessmann have already agreed a transaction that will see the latter’s climate solutions business change hands in a deal slated for the end of 2023.
In a statement, Viessmann said the combination would create a new ‘global champion in intelligent and energy solutions’ after the equity and share deal. The family run business will become one of the largest shareholders in Carrier. At the same time, the transaction would create an ‘unprecedented market leader in both residential segments in North America and Europe’.
But the deal has been met with some concern among real estate consultants and property investment firms operating in Germany.
Viessman is one of the largest providers of heating, cooling, ventilation, energy generation and energy storage including sun, wind and biomass, as well as oil and gas.
Heat pumps, which harness renewable energy from the ground, sun, groundwater or air, are one of its top products.
Almost exactly at the same time as news of the sale of Viessmann’s energy solutions group, Germany’s cabinet approved a bill that will ban most new oil and gas heating systems in Germany from 2024 to encourage more use of renewables, and thus heat pumps. The bill is due to be heard in Germany’s Parliament in June.
In its present draft, the new law would require almost all newly installed heating systems to run on 65% renewable energy in new and existing buildings.
Participants at the PropertyEU Green Roadshow held in Frankfurt on the same day as Viessman's news emerged, flagged the transaction and the new bill.
Companies represented at the event, and which commented upon the transaction, were Pimco Prime Real Estate, Catella Residential IM, JLL, and Union Investment.
JLL’s Dunja Nigrin, head of project & development services in the DACH region and herself a civil engineer, gave her initial thought: ‘The news this morning suggests we could lose a big part of one of our biggest heat pump producers in Germany, yet from next year the government has said we must instal heat pumps everywhere, so it is a big impact for us. The concern being felt is that they will take the product or move it to Asia or elsewhere.’
Such a move would threaten increased prices and delivery times too, suggested panellists.
Just a week later, and it is too early to tell what impact the transaction might have.
However, Viessmann has issued FAQs on its transaction with Carrier. It said the headquarters of Viessmann Climate Solutions remains in Allendorf where production also remains. Heat pumps will continue to be produced in Europe for Europe, it insisted.
A full report on the Frankfurt leg of the PropertyEU ESG Roadshow will be published in due course.
