BERLIN: Chinese electrical appliance manufacturer Midea said yesterday that it plans to invest up to 4 billion euros (US$4.5 billion) to more than double its stake in Kuka AG, a German-based robotics and automatic systems provider.
Midea said in a filing to the Shenzhen Stock Exchange that through its subsidiary Mecca International, it will increase its holding to more than 30 percent, from 13.5 percent at present, and in doing so become Kuka’s largest shareholder.
Its bid price was 115 euros per share, which represented a premium of almost 60 percent from Kuka’s closing price on February 3, the day before the deal was announced.
If successful, it will be one of the biggest overseas investment deals by a Chinese firm this year.
Midea said it had no intention of ending up in a “position of dominance,” but was obliged by regulations to make an offer to all shareholders. It said also that it wants to keep Kuka’s management intact and has no plans to delist the company.
The investment is seen as key to Midea’s expansion plans as its core air conditioning business is facing increasing challenges due to an oversupply.
Analysts said the investment could give Midea technological know-how in an area with growth potential in China, while expanding Kuka’s customers in the world’s workshop.
“As a traditional producer of durable consumer goods, Midea’s domestic market is almost saturated,” said Huang Fusheng, an analyst at China Securities.
The company “needs to expand industries and transform, so this (investment) is a necessity,” he said.
Kuka was established in 1898 and specializes in robotics and automation systems for the automotive and industrial sectors.
Midea said earlier that it plans to invest 1 billion yuan (US$153 million) a year in robotics and automated manufacture.
China is encouraging its cashed-up companies to invest in foreign targets to improve their balance sheets and strengthen operations as economic growth slows at home.
