Midea emerges from the shadows with Kuka offer

Midea, China’s biggest maker of home appliances, looks set to waltz into the big league if it succeeds in its takeover of German robotics firm Kuka next week.

For the Guangdong-based industrial giant , the deal is not just another acquisition, but a valuable opportunity to establish its global credentials, cut manufacturing costs and gain access to valuable technology that is crucial for its next stage of development. Kuka already supplies key components to auto giants like Volkswagen, BMW and Tesla and this could come in more than handy for Midea.

Though the takeover has faced considerable objection from German policymakers and industry bigwigs, the dice seems to have been more or less cast the Midea way. Though the extended offer period does not expire till Wednesday, analysts expect it to be a done deal as the Chinese firm already owns about 86.49 per cent of Kuka.

In June, the maker of air-conditioners, rice cookers and other home appliances said in a filing to the Shenzhen Stock Exchange that it had no intention of delisting Kuka for the next seven-and-a-half years. Though the move followed an agreement between the two companies, it clearly spelt out its intentions of retaining the Kuka identity. In any case, the German stock market does not have a free float requirement.

Midea’s move is the latest example of Chinese companies buying into advanced machinery companies across the world. The global machinery sector has seen a flurry of acquisitions from Chinese company after the country made ‘manufacturing upgrading’ a national strategy last year in its “made in China 2025” blueprint. Analysts equate the plan to Germany’s “fourth industrial revolution”.