A centuries-old dynasty overhauls billions of dollars in a rare M&A bet

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(Bloomberg) — Over the past century, the Viessmanns built one of the world’s biggest fortunes with a manufacturing empire spawned from a small workshop in the German state of Bavaria.

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The billionaire family is now selling one of the pillars of Europe’s largest economy in a rare overhaul of its 106-year-old fortune.

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Carrier Global Corp. agreed this week to buy the heating and cooling division of the Viessmanns namesake company in a cash and stock deal. The deal will push the family’s fortune to $14 billion, more than double from a year ago, according to the Bloomberg Billionaires Index.

The move disrupted a business empire that dates back to 1917, when Johann Viessmann founded his workshop after working as a factory worker and blacksmith.

His fortunes changed a decade later. A gardener asked for a better way to heat the most delicate plants in his greenhouse, prompting Johann to build and patent a steel boiler. That has been the driving force behind the family business for decades.

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Martin Viessmann, 69, and his son Maximilian, 34, have run the company in recent years alongside executives outside of the family. Maximilian became sole chief executive in July. He worked at Boston Consulting Group before joining the business as chief digital officer.

The pair pushed the Allendorf, Germany-based company to adopt newer technologies such as heat pumps, electrical storage and digital services, helping to protect against a downturn in its traditional business. of the company.

“We have a very broad position,” Maximilian said Wednesday in an interview with local reporters. “We’ve been very thorough with how the market is going to develop in the long-term.”

Viessmann is closely held as one of the so-called Mittelstand companies, which is the foundation of Germany’s industrial prowess. Most medium-sized companies, often family-owned, provide more than half of the country’s jobs and economic output.

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Such companies have made Germany Europe’s biggest source of wealth among the world’s ultra-wealthy, and very few have sold off key parts of their businesses. Messer, a family-controlled industrial gas producer for more than a century, is in talks to sell shares to Singapore’s wealthy investment fund GIC Pte and the infrastructure arm of EQT AB , people with knowledge of the discussions said earlier this year.

“Many non-German companies regularly hunt for Mittelstand companies, but many do not sell out,” said Jeffrey Fear, professor of international business history at the University of Glasgow. One of the company’s strengths is its “global outlook with local roots.”

The world’s richest families often set up outside companies to diversify their assets after a major liquidity event, and the Viessmanns have built up ways of doing so in recent years.

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They founded a family holding company in 2020, currently managing a venture capital division — originally founded in 2017 — and a real estate division. It also oversees the clan’s foundation, which recently raised money to support families inside and outside Ukraine.

Their venture arm, VC/O, has allocated funds to investment funds in early-stage energy and deep-tech businesses. Viessmann Real Estate, established as part of a 2020 restructuring, plans to develop unused sites of the dynasty’s operating businesses.

If the transaction with Carrier is complete, the family will receive about 9.6 billion euros ($10.5 billion) before tax consideration. A company spokesman said the Viessmanns plan to allocate most of the proceeds to philanthropy and the business that bears their name.

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They are also set to take ownership of about $2.7 billion of shares in the publicly traded Carrier, making them one of the company’s largest shareholders. Shares have risen more than 240% since the Florida-based company spun off United Technologies Corp. in 2020, little has changed this year.

The deal is expected to be completed by the end of the year, although German regulators are considering it to protect green tech jobs. Maximilian Viessmann will join Carrier’s board if the sale goes ahead.

The German manufacturer announced plans to invest 1 billion euros in green climate solutions last year, meaning the Viessmanns are far from finished building their empire, even if they cede control. business that made them rich.

“Becoming a family entrepreneur is not a job, it’s a mission,” Maximilian said in a 2021 interview. “I just shoulder the responsibility for the company from generations to come. “

—With support from Andrew Heathcote, Tom Maloney, Pei Yi Mak, Aaron Kirchfeld and Eyk Henning.