Chinese home appliance maker Midea Group made an offer yesterday to buy German factory robot manufacturer Kuka AG, the latest bid by a Chinese investor to gain control of cutting-edge German industrial technology. 
The €115 per share offer values Kuka at around €4.5bn ($5.07bn) and represents a premium of 36% to Kuka’s share price of €84.41 at close on Tuesday. Shares in Kuka rose by over 30% on the news. 
Kuka is one of the world’s largest producers of industrial robots and a poster child of Germany’s drive to upgrade its manufacturing sector to master the industrial internet. 
It is the latest in a series of German industrial groups to be targeted by Chinese buyers as the world’s second-largest economy tries to make the transition from a low-cost factory location into a high-tech industrial hub. 
Midea said it wanted to keep Kuka’s management intact and not delist the German company. Following a pattern set by Chinese suitors seeking to avoid disruption to better understand and adopt Western technology, it said it would not implement a so-called profit transfer and domination agreement. 
“Kuka is in excellent condition today and we are committed to investing in KUKA’s employees, brand, intellectual property and facilities to further support the company’s development,” Midea chairman and chief executive Paul Fang said in a statement. 
Midea said it aimed to expand Kuka’s know-how in robotics for general industry and logistics applications and open doors for better access to Chinese markets. 
“One of the leading rationales for the deal is rising labour costs. This means efficiency becomes more important for growing our business and for the Chinese economy as a whole,” Andy Gu, vice president for Midea’s international business, told Reuters. 
“We want to keep Kuka’s separate identity as a German company,” he said. “Where we can help Kuka is mostly in China. Kuka management has plans to grow in China. Given our meaningful footprint in China we can help them accelerate growth in terms of our customer base and supply chain.” 
Other Chinese investment in Germany this year includes an agreement in January by a consortium led by ChemChina to buy industrial machinery manufacturer KraussMaffei Group for about $1bn. 
In 2012, China’s Sany Heavy Industry bought German concrete pump maker Putzmeister for $698mn, while Weichai Power took a 25% stake forklift truck maker Kion in 2012. 
Germany depends on manufacturing for a larger share of the economy than any of its western European neighbours, with tens of thousands of family-owned businesses building the bedrock of its export-driven success. 
The government wants to foster adoption of the fast-evolving industrial Internet, in which smart factory systems are becoming increasingly connected. Kuka has branded itself as one of the pioneers. 
Kuka shares jumped as much as 35.5% to a record high yesterday and traded 32% higher at 0743 GMT on the Frankfurt Stock Exchange. 
Midea said it had a 13.5% stake in Kuka and was seeking to become the largest shareholder by raising its stake beyond 30%. 
Augsburg Kuka has three large shareholders including Friedhelm Loh, a German entrepreneur who owns 10%, and Voith Group which holds 25.1%. 
Kuka said it had been informed by Midea that Midea would invite the major German shareholders to stay invested and that it wants to preserve Kuka’s sites and staff. 
Kuka would carefully assess the full takeover offer once it is available, it added. 
An ally of chancellor Angela Merkel said Berlin would not intervene as German companies were also buying stakes in Chinese and other foreign companies. 
“We live in a free market economy and expose ourselves to global competition,” said Michael Fuchs, deputy leader of Merkel’s CDU/CSU parliamentary group in Germany’s lower house. 
In terms of direct investment in property, plants and equipment, Germany’s private sector has spent almost €60bn in China, dwarfing the €2bn that Chinese groups have invested in Germany, according to the Association of German Chambers of Commerce and Industry. 
Jost Wuebbecke of Berlin-based China-focused think tank Merics, which is backed by the Schmidt family behind retailer Metro, said Chinese foreign direct investment in Germany was welcome in principle but Kuka was an exception because of its role in the industrial Internet. 
“From a German point of view it’s not necessarily an advantage to share the technology because of Germany’s very considerable lead in this area,” Wuebbecke said. 
Under German takeover rules, any shareholder gaining control of more than 30% in a listed company must make an offer to all shareholders. Midea Group raised its stake in Kuka to 10.2% in February, saying at the time that it wanted to further increase its shareholding.