US government approves China's Midea Group's takeover of German robotics maker Kuka
30 December 2016
Chinese home appliance maker Midea Group today said that US regulators have approved its acquisition of German robotics maker Kuka AG and will close the deal in the first half of January 2017.
In May, Midea, which holds an indirect 13.51-per cent stake in Kuka, offered to buy the robot manufacturer for €115 per share, a premium of 36 per cent to Kuka's 17 May closing share price of €84.4. (See: China's Midea Group offers to buy German factory robot manufacturer Kuka for $5.07 bn) In a separate statement, Kuka said, "the United States government authorities Committee on Foreign Investment in the United States and the Directorate of Defense Trade Controls on December 29, 2016 have cleared the takeover of Kuka".
The bid for Kuka, did not go down well some with a section of German lawmakers who feared that advanced technologies were falling into Chinese hands while China protects its own companies against foreign takeovers.
In order to ease German political concerns, Midea agreed to not delist Kuka, retain the company's management, its headquarters in Germany, maintain factories and employees until 2023.
Even Voith Group, the largest shareholder in Kuka with a 25.1-per cent stake, agreed to sell its stake to Midea for about €1.2 billion ($1.34 billion) paving the way for a smooth takeover.
Founded in 1898 by Johann Joseph Keller and Jakob Knappich in Augsburg with the aim of producing 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 over 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.