On November 23, Midea Group announced that it plans to acquire and take private Kuka Aktiengesellschaft, a veteran industrial robot manufacturer, through a wholly-owned subsidiary. Upon completion of the acquisition, Kuka will become an overseas subsidiary wholly controlled by Midea and be delisted from the Frankfurt Stock Exchange. Midea said the acquisition will help Kuka focus on its business and improve the company's internal resource synergy and sharing in robotics and automation-related businesses.
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Meanwhile, Kuka CEO Peter Mohnen said, "Kuka has turned a profit and is on a clearer path. In 2021, we expect a pre-tax profit of around €60m on sales of €3.1bn." Midea Group and Kuka management have developed a joint growth strategy that aims to significantly enhance Kuka's position as a leader in industrial robot automation by 2025. To this end, the two sides plan to increase r&d investment in Augsburg by at least 15% by 2025 from 2021. Kuka's delisting from the Frankfurt Stock Exchange will allow it to focus more on business operations to drive its growth more effectively.
In order to ensure the smooth implementation of the 2025 growth strategy, Kuka will focus on integrating its robotics expertise and application technology in the future to further improve the position of its products in the global market and regional markets. This includes both the company's overall product plans and the need for retail robots and logistics solutions driven by e-commerce and retail in some targeted areas. For the rapidly growing robot demand market, Kuka will further strengthen targeted technology research, and its global branches will be more closely linked and coordinated.
"We need to focus on technology development and innovation, and we need midea's full support, which is our long-term strategy for Kuka together. Now, we have set the framework and made it clear that Kuka will focus more on operations in the future. Midea is committed to significantly increasing our r&d spending in Augsburg to foster innovation and attract and retain talent. The 2025 growth plan is far more ambitious than the existing investment agreements." In addition, the vision includes making automation easier and more intuitive for everyone to use by 2030. By then, "programming robots will be as easy as using laptops or mobile devices today, and Kuka is working to develop a future-oriented operating system that focuses on the simple operation and intuitive processing of automation solutions."
As of the date of the announcement, Midea holds more than 95% of all kuka shares. Dr. Gu Yanmin, chairman of the board of Supervisors of Kuka Joint-stock Company and vice president of Midea Group, said that due to the low average daily trading volume, the current listing and circulation of Kuka does not have any substantial benefits for the enterprise itself. In addition, due to its low free float, Kuka is no longer a key reference company in the German stock index. After delisting, Kuka will waive the regulatory requirements of being a listed company and its market strategy can be more flexible.
"The global robotics and automation market remains vibrant, especially? The demand for automation and logistics related robot products and services in China and Asia is stronger than ever. For Kuka to seize this momentum, a unified shareholding structure is crucial; Midea's acquisition of Full ownership of Kuka takes our cooperation to a new level and helps greatly enhance Kuka's competitiveness."
"The privatization of Kuka was a joint decision of both parties. Through this operation, kuka paves the way for the company to improve efficiency, speed and competitiveness, helping to achieve kuka's growth goals in Europe, the Americas and especially In China. We will continue to respect and abide by the investment agreement and fencing agreement signed by both sides in 2016. The 'A' in KUKA will also continue to represent Augsburg."
Domestic appliances, analysts say, in recent years, home appliance, including midea, haier, etc, outside companies are expanding home appliance "second track", and beauty is buying a library card, Wan Dong medical treatment and a series of "crossover" enterprise, extended its tentacles yan to industrial automation and medical fields such as wisdom, efforts to "technology companies". However, as midea's original home appliances and industrial robots are far apart, there is no professional and technical personnel, professional channels, in the process of integrating kuka through some detours. After Midea's acquisition, due to various problems in the run-in period, Kuka experienced a decline in revenue and profit in consecutive years since 2017, and formed a huge goodwill cost.
At the same time, as a German listed company, all decisions of Kuka need to follow the regulatory process of listed companies. Relatively speaking, Kuka is independent in operation, and Midea Group cannot interfere in its business matters and personnel structure too much. As Midea privatises Kuka, Kuka becomes a wholly-owned subsidiary of Mei, which will improve the efficiency of communication and decision-making.
In recent years, Kuka's revenue in The Chinese market has been growing. In the first half of 2021, Kuka achieved revenue of 1.529 billion euros, of which the Chinese market contributed 262 million euros. China is already the world's largest market for industrial robots, and midea is expected to further increase kuka's share of revenue in China after privatizing the company.
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