Chinese appliances firm Midea is close to raising its stake in German industrial robot maker Kuka to more than 30 percent, in the latest major effort from a Chinese company to acquire more holdings overseas.
Midea, China’s biggest producer of heating, ventilation and air conditioning systems, is offering 115 euros ($130) per share, putting Kuka’s valuation at around 4.6 billion euros (close to $5.2 billion).
However, Midea said it wasn’t seeking to gain controlling shares or take over Kuka altogether. Little is expected to change if the sale pushes through. Kuka headquarters are to remain in the southern German city of Augsburg. Production facilities and the company's 12,300-strong workforce are to remain intact.
"We believe that a larger shareholding strikes the right balance between an independent Kuka while also putting both companies in a position to drive further growth through collaboration, especially in China," Paul Fang, chairman and chief executive officer of Midea, said in a statement.
Expansion in the logistics market and the chance to drive more automation with its existing clients are considered particularly interesting for Midea.
"As a traditional producer of durable consumer goods, Midea's domestic market is almost saturated," Huang Fusheng, an analyst at China Securities, told the news agency AFP.
He added that Midea needed to expand its industries and transform, so this investment was a "necessity" for the Chinese firm.
Kuka, on the other hand, would benefit from an expanded customer base in Asia’s biggest market, as it seeks to boost its business beyond a dependence on the automotive industry, and move more into logistics, aviation, IT, and electronics.
The robotics maker wants to boost its sales to up to 4.5 billion euros by 2020, from its most recent 2.97-billion-euro result.
Midea first bought a 5 percent stake in Kuka in August 2015, which it increased to 10.2 percent in February. Currently, the biggest shareholder in Kuka is plant manufacturer Voith.
Midea’s planned acquisition represents the latest in a wave of Chinese deal-making abroad. In February, state-owned ChemChina bid $43 billion for Swiss seed technology company Syngenta, which would be the bigger ever overseas deal for a Chinese company if realized.
Chinese aviation and tourism conglomerate HNA said in April it would buy US-based Carlson Hotels, owner of the Radisson brand, to expand its footprint on the American market.
jd/uhe (Reuters, dpa, AFP)