A Century-Old Dynasty Overhauls Its Billions in Rare M&A Bet

(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 firms underpinning Europe’s largest economy in a rare overhaul of its 106-year-old fortune.

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

The move breaks up a business empire dating to 1917, when Johann Viessmann set up his workshop after stints as a factory worker and blacksmith.

His fortune changed a decade later. A gardener asked for a better way to heat the most delicate plants in his greenhouse, leading Johann to create and patent a steel boiler. That became the driving engine of the family’s business for decades.

Martin Viessmann, 69, and his son, Maximilian, who turns 34 this year, have run the firm in recent years along with executives from outside the family. Maximilian became sole chief executive officer in July. He worked at Boston Consulting Group before joining the business as chief digital officer.

The pair have pushed the Allendorf, Germany-based company into newer technologies such as heat pumps, electricity storage and digital services, providing protection from downturns in its traditional business.

“We are very broadly positioned,” Maximilian said Wednesday in an interview with local reporters. “We have dealt very intensively with how the market will develop in the long term.”

Closely held Viessmann is one of the so-called Mittelstand firms that are the foundation of Germany’s industrial prowess. The mostly medium-sized, often family-owned companies provide more than half of the country’s jobs and economic output.

Such firms have helped make Germany the biggest source of European fortunes among the world’s ultra-wealthy, and few have sold off major parts of their business. Messer, the industrial gas maker that’s been controlled by its namesake family for more than a century, was in talks to sell a stake to Singaporean wealth fund GIC Pte and EQT AB’s infrastructure arm, people with knowledge of the discussions said earlier this year.

“Many non-German companies regularly go hunting for Mittelstand firms, but many don’t sell out,” said Jeffrey Fear, professor of international business history at the University of Glasgow. One of the firms’ strengths is “a global outlook with a local rootedness.”

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

They established a family holding company in 2020 that now manages a venture capital division — originally established in 2017 — and a real estate unit. It also oversees the clan’s foundation, which recently donated money to help support families in and from Ukraine.

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

If the Carrier transaction is completed, the family will receive about €9.6 billion ($10.5 billion) before tax considerations. The Viessmanns plan to allocate most of the cash proceeds into philanthropy and their namesake business, a company spokesman said.

They’re also set to take ownership of a roughly $2.7 billion stake in publicly traded Carrier, putting them among its biggest shareholders. The stock, which has returned more than 240% since the Florida-based company separated from United Technologies Corp. in 2020, is little changed this year.

The deal is expected to be completed by year-end, though German regulators are reviewing it to safeguard green-technology jobs. Maximilian Viessmann will join Carrier’s board if the sale goes through.

The German manufacturer announced plans last year to invest €1 billion in green climate solutions, meaning the Viessmanns are far from done building out their empire, even as they cede control of the business that propelled them to riches.

“Being a family entrepreneur is not a job, but a vocation,” Maximilian said in a 2021 interview. “I have only borrowed responsibility for the company from the generations to come.”

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