Midea Said to Plan Takeover Offer for Germany’s Kukaby and
Chinese company could make offer as soon as Wednesday
Midea may not seek full ownership of the German robot maker
The offer to all shareholders could be made as soon as Wednesday, the people said, asking not to be named because the discussions are private. The Chinese company is seeking to increase its stake in Kuka to at least 30 percent, but is unlikely to gain full control of the company, they said. A 30 percent stake would make Midea the biggest shareholder, leapfrogging Germany’s Voith family.
Representatives of Midea and Kuka declined to comment. The Wall Street Journal reported on the planned bid earlier on Tuesday. Trading of Midea’s shares was suspended Wednesday on the Shenzhen Stock Exchange.
Kuka is already helping Midea to automate its factories, after the Chinese company doubled its stake to around 10 percent earlier this year, Chief Executive Officer Till Reuter said in March. Midea may help improve Kuka’s access to the Chinese market, according to the people with knowledge of the planned bid.
“Midea wants to build smart factories that use less labor to produce smart appliances, as China’s working population is dropping and they need to adjust to higher labor costs,” said Juliette Liu, analyst at Yuanta Securities Co. “The company intends to use Kuka to establish a dominance over industrial robotic manufacturing techniques in China.”
Kuka has expanded its Asian presence in recent years, opening a Shanghai factory in 2013 and increasing its China headcount by around 50 percent in 2015. The company currently generates around 420 million euros ($475 million) in sales in China, a figure which it hopes to expand above 1 billion euros by 2020, Reuter said.
Midea had a 70 billion yuan ($10.7 billion) war chest for acquisitions, Vice President Yuan Liqun said in a March interview. It used $490 million of that hoard to buy Toshiba Corp.’s home appliances business the same month.
Kuka stock has risen 1.6 percent to 84.41 euros this year, valuing it at 3.4 billion euros.
Any effort to acquire complete control of Kuka would need the assent of shareholders Friedhelm Loh and the Voith Group, who between them own almost a third of the company.
(An earlier version of this story corrected the company’s name in the second paragraph.)