Midea Group Co (美的集團), China’s biggest appliance manufacturer, began a tender offer to raise its stake in Kuka AG that values the industrial robot maker at 4.6 billion euros (US$5.2 billion) and has provoked calls from within the German government for an alternative European investor.
Midea is offering 115 euros per share, contingent on it being able to increase its stake to at least 30 percent, the Foshan, China-based company said in a statement yesterday.
It pledged to help Kuka beat a 2020 sales target by broadening the product range to tap the full extent of the Chinese market as well as expanding into household robots for cleaning.
The deal has triggered concerns from the German government about the longer-term intentions of state-backed Chinese investors and overshadowed a visit to China earlier this week by German Chancellor Angela Merkel.
German Minister for Economic Affairs and Energy Sigmar Gabriel is leading a German charge to find a European suitor, courting potential buyers that have included ABB Ltd and Siemens AG, a government official said earlier this month.
Efforts to find regional investors are continuing, German Deputy Minister for Economic Affairs and Energy Matthias Machnig said.
Midea yesterday reiterated that it has no plans to delist Kuka shares or seek control.
Kuka, which is based in Augsburg in the south of Germany, has 14 days to respond to any formal offer, spokeswoman Katrin Stuber-Koeppe said.
Midea would be able to help Kuka exceed its 2020 sales goal of 4 billion euros to 4.5 billion euros, of which 1 billion euros is expected to come from China, the Chinese company said.
The two companies can collaborate on logistics and supply chain, allowing cost savings as well as boosting revenue from warehouse and distribution robots.
“We want to support Kuka’s growth and unlock together the huge growth potential of the Chinese market,” Midea chairman Paul Fang (方洪波) said in the statement. “Cutting-edge technology from Germany and Midea’s long-term experience and network in the Chinese market will allow us to benefit from the growth opportunities across different industries in China.”
Germany is still seeking a European investor to buy Kuka, but would not oppose China’s taking a minority holding in the robot maker, government officials said on Tuesday.
The government would not stand in the way of a Midea stake of 49 percent or less, if suitable buyers in the region can be found for the rest of Kuka, said the officials, who asked not to be identified.
“Midea has done initial negotiations with other Kuka shareholders and it would not have made the public offer if it was not confident that this price would get it the shares that it wants,” Yuanta Securities Co (元大證券) analyst Juliette Liu (劉珮昀) said.
Kuka’s largest shareholders are Friedhelm Loh and Voith GmbH, who between them own about a third of the company.
So far no competing bid has emerged for Kuka.
Siemens chief executive officer Joe Kaeser has said the German engineering company is not interested.
ABB would consider making a rival bid should it be solicited by Kuka, the Wall Street Journal reported on Tuesday, citing unidentified people familiar with the matter.
In Germany, a government official said earlier this month that the German Ministry for Economic Affairs and Energy is also looking at whether it could use a foreign trade law to give it a say in the Midea deal for Kuka.
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