Kuka AG is a German manufacturer of industrial robots and solutions for factory automation. The company was founded in 1898 in Augsburg, Germany, by Johann Josef Keller and Jacob Knappich. In 2014 Voith GmBH, one of the largest family owned businesses in Europe acquired 25.1 percent stake of Kuka. Now barely two years later, Voith is set to offload its stake in Kuka to China’s Midea Group Co. at an estimated value of about 1.2 billion euros ($1.3 billion). Incidentally, Kuka’s third-biggest shareholder, Friedhelm Loh, has also decided to sell his shares to Midea. The combined purchases would take the Chinese company’s shareholding to just under 50 percent, well above the 30 percent it was seeking as part of the tender offer.

The deal is being closely scrutinized by lawmakers in Germany. German politicians are concerned about the transfer of key technologies used in car and aircraft manufacturing to China. They even tried in vain to search for an alternate bid from a European suitor. China, on the other hand, has pushed its companies to “go out” and invest in foreign targets to increase their technological capabilities and seek new markets as economic growth slows at home. China’s deals with Germany have increased in number to 25 so far this year from 11 for the period in 2015, according to data from Dealogic.

In an effort to address these concerns, Midea has assured the independence of Kuka’s board and refrain from the restructuring or delisting of the German group for the next seven and a half years. It has also pledged to preserve existing factories and jobs. Midea wants to transform its own manufacturing line with robot technology and is aiming to cut its workforce by a fifth to 80,000 by 2018.

Source: Bloomberg