* Offer worth 60 CHF per share in cash and shares
* Total value of offer 638 million CHF
* Nibe wants to create European leader in sustainable energy
(Adds analyst comment, share price reaction)
By Simon Johnson and Mattias Lovkvist
STOCKHOLM, April 11 (Reuters) - Swedish heat pump maker Nibe Industries on Monday launched a $700 million bid for Switzerland's Schulthess Group to build a leading position in the growing European market for sustainable heating.
Nibe said it had bought 31 percent of Schulthess and was offering 60 Swiss francs per share for the remainder of the firm, which supplies heating, cooling and washing technology.
The offer is made up of 60 percent in cash and 40 percent in new Nibe B shares.
Nibe, which among other things makes geothermal heating pumps for houses, said the transaction corresponds to a total equity value of 638 million Swiss francs ($699.4 million) and had been recommended by Schulthess' board.
The deal will give Nibe a wider product range in boilers, heat pumps and solar panels, expand its market to include more commercial and industrial customers and give it a broader distribution network.
Analysts said that Schulthess' leading position in heat pumps in Germany, Switzerland and Austria was particularly attractive.
If the full buy-out goes ahead, Nibe said it expected synergies of approximately 12 million Swiss francs in operating earnings improvements on an annual basis with a full effect in the financial year 2013.
"There is a lot of overlap in their product portfolios and the markets they are in," said one analyst who declined to be identified.
However, shares in Nibe were down 3.5 percent at 103.75 crowns at 0955 GMT.
"Clearly consensus is that they have paid a bit too much," said Peter Naslund, analyst at Swedbank. "It doesn't look exactly cheap."
Shares in Schulthess were up 10.9 percent at 58.55 Swiss francs.
Nibe, which has annual posted sales growth of 20 percent since 1993, made an operating profit of 796 million crowns on sales of 6.5 billion crowns in 2010.
It said Schulthess would be operated as a separate unit and be part of Nibe's business area Nibe Energy Systems, its biggest unit.
Schulthess made an operating profit of 229 million crowns, excluding restructuring costs, in 2010 on sales of 2.1 billion crowns. ($1=.9122 Swiss Franc) (Editing by David Cowell)