German factory robot Kuka close to agreeing to sell itself to China's Midea Group
27 June 2016
German factory robot manufacturer Kuka AG is close to agreeing to sell itself to Chinese home appliance maker Midea Group after thrashing out issue like factories, jobs, and headquarters, Reuters yesterday reported, citing a source close to the negotiations.
Midea has agreed to not delist Kuka, keep the company's management, its headquarters in Germany, maintain factories and employees until 2023, the report said.
"Now the details just need to be finalised so that the agreement can be signed in the coming days," the source told Reuters.
In May, Midea, China's biggest maker of home appliances, had tabled an unsolicited €4.5-billion ($5.07 billion) buyout bid for Kuka. (See: China's Midea Group offers to buy German factory robot manufacturer Kuka for $5.07 bn) Midea had offered to pay €115 per share, a premium of 36 per cent to Kuka's 17 May closing share price of €84.41.
The Guangdong province-based company is the second-largest shareholder in Kuka with an indirect 13.5 per cent stake.
The largest shareholder is German privately held engineering company Voith Group with 25.1 per cent, and German billionaire Friedhelm Loh holds 10 per cent through his holding company.
The German government was not in favour of the deal since it did not want advanced technology to go to the Chinese and was looking at whether it could use a foreign trade law to block the deal or get a European suitor to counter bid for Kuka.
German economy minister Sigmar Gabriel unsuccessfully tried courting potential buyers like ABB Ltd, Siemens AG, and Robert Bosch GmbH.
Founded in 1898 by Johann Joseph Keller and Jakob Knappich in Augsburg with the aim to produce affordable illumination for houses and streets, Kuka is today one of the world's leading suppliers of robot technology and plant and systems engineering.
With manufacturing plants in Michigan and Ohio, Kuka is one of the leading suppliers of manufacturing systems for the automotive industry in North America.
China is its strongest growth market for automation. The headquarters for its Asian business is located in Shanghai, where it opened a new robot production facility in 2014.
Founded in 1968, Shenzhen-listed Midea owns some of China's top air-conditioner, refrigerator and washing machine brands.
It has more than 200 subsidiaries globally, employs around 100,000 people and has annual sales of over $21 billion.
Midea established its first overseas factory in 2007 near Ho Chi Minh City in Vietnam to manufacture rice cookers, air-conditioners and refrigerators.
The company has operations and production bases in Vietnam, Belarus, Egypt, Brazil, Argentina and India, and technology and partnerships with Carrier of the USA and Toshiba of Japan.
The company has recently been looking at overseas acquisitions in order to expand internationally.
In March, it agreed to acquire a controlling 80 per cent stake in Japanese conglomerate Toshiba Group's consumer-electronics arm for about $473 million.