China’s Midea said it would allow German industrial robot maker Kuka to operate independently and help it expand in China as it formally launched a €4.5bn ($5.1bn) offer yesterday.
Kuka is the biggest German industrial technology company to be targeted by a Chinese buyer in a wave of deals over recent months and its announcement a month ago of its planned bid caused a furore among German politicians.
Speaking during a visit to Beijing this week, Chancellor Angela Merkel signalled that she would not try to prevent a takeover but also left the door open to German firms making a counter-offer.
However, no potential German or European rival bidder has emerged at this stage.
Home appliance maker Midea reiterated its aim to acquire more than 30% of Kuka, which would oblige it to bid for the rest of the company under German takeover law.
Its offer represents a 36% premium to Kuka’s share price before the approach was first announced.
The Chinese company said it could help Kuka to broaden its product offering in China, the world’s largest market for industrial robots, and could support Kuka’s local supply chain and distribution. “Midea fully supports the operational independence of Kuka’s business and regards the continued leadership of the current management team as critical to Kuka’s continued success,” the Chinese company said.
It committed to preserve Kuka’s sites, employment levels, brands and intellectual property. Midea said it had secured financing from the Industrial and Commercial Bank of China.
Kuka’s chief executive Till Reuter said he would now begin negotiations with Midea and would make a detailed statement about the offer within two weeks. Reuter had told shareholders at the company’s annual meeting last month that Midea’s offer supported Kuka’s strategy.
Kuka shares rose 2.4% to €108.60 by 0905 GMT and were the top gainers in the German mid-cap index, which was down 0.6%.
Midea, which already owns 13.5% of Kuka, confirmed it was offering €115 per share and said its offer would run from June 16 to July 15.
It said it welcomed a diversified shareholder base with a high free float.
Barclays capital goods analysts, who rate Kuka “equal weight”, wrote in a note: “We struggle to see a Western company making a counteroffer at this level.” The chief executive of industrial group Siemens, the most natural German partner for Kuka, said at the weekend Siemens had no interest in becoming a white knight.
Switzerland’s ABB, which has a large robotics business of its own, has declined to comment on reports that it would in principle be interested if the price were lower. Privately held German engineering group Voith, which owns 25% of Kuka, said it would examine the offer carefully and in detail.
German billionaire businessman Friedhelm Loh, who owns 10%, was not immediately reachable for comment.