Rheem parent moves forward with Fujitsu HVAC acquisition

Rheem’s parent company, Paloma Rheem Holdings, has completed its tender offer for Fujitsu’s HVAC subsidiary, Fujitsu General, nearly five months after announcing it would acquire the company, according to a Thursday announcement. 

The big picture: The deal caps a two-year effort by Fujitsu to sell its HVAC business, and marks the third major OEM acquisition in the past year, following Bosch and Rheem’s acquisitions of Johnson Controls’ residential portfolio and Nortek, respectively. 

What’s happening: Paloma Rheem Holdings launched a tender offer on April 28 and successfully acquired nearly 47 percent of Fujitsu General’s voting shares, becoming its largest shareholder. Fujitsu General has a market cap of around $2 billion. 

• Zoom out: Rheem and Fujitsu General first partnered in 2016 to capitalize on the growing U.S. demand for ductless systems, introducing their first joint product in 2020. 

What they’re saying: The deal will enable “more in-depth collaboration for sales of a wider range of [Fujitsu] products through [Rheem’s] extensive sales channels for air conditioners and water heaters in North America,” a January statement said. 

• Since “Rheem primarily focuses on ducted air conditioners and [Fujitsu’s] strengths are ductless and VRF products… [Paloma Rheem Holdings] believes that synergies can be created without any product competition,” it added. 

What’s next: The shares are set to officially change hands on June 5, with Paloma Rheem Holdings planning to conduct “squeeze-out procedures” to acquire the rest of the business by late August, per the announcement. 

• A representative for Paloma Rheem Holdings declined to comment.