Kuka Deal

Angela Merkel and the Robots

Bundeskanzlerin Angela Merkel (CDU) sieht sich am 14.06.2016 im Industriemuseum in Shenyang (China) eine Präsentation zu Industrie 4.0 an. Merkel ist zu einem dreitägigen Besuch in China. Foto: Rainer Jensen/dpa +++(c) dpa - Bildfunk+++
Angela Merkel visits a factory in China on Tuesday.
  • Why it matters

    Why it matters

    Germany is worried about the loss of technological know-how in a possible takeover of Kuka by Midea.

  • Facts

    Facts

    • Chinese appliance maker Midea said it wanted to raise its stake in Kuka to at least 30 percent from 13.5 percent.
    • The bid, which values Kuka at €4.6 billion ($5.2 billion), would give the Chinese company effective control.
    • The German government favors a bid by a European firm to prevent technology transfers overseas.
  • Audio

    Audio

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Angela Merkel just couldn’t get away from the robots.

The planned Kuka Midea deal, where a Chinese appliance maker wants to increase its stake in a German robotics group, has dominated the chancellor’s visit to China this week.

On her third day, Ms. Merkel’s Chinese hosts invited her to Shenyang in the north-east of the country.  In the city’s industrial museum they presented a test construction area with robots building model vehicles. And two of the robots turned out to have been made by Kuka.  Ms. Merkel wanted to know what the Kuka robots did better. The Chinese expert replied that they were more flexible.

Kuka is set to take off in China and there is no doubt that a deal with Midea will help the Bavarian company grow at a rapid rate there. But in Germany, there is still a debate raging about how Chinese Kuka should be allowed to become. This question is being discussed on many levels, also by politicians. Some fear a sell-off of state-of-the-art German technology.

The federal government is very keen for the pioneering company to remain – at least partly – in German hands for the “Industrie 4.0” digitization project. In government circles, there has been talk of a strong German anchor shareholder – also that the government had received a signal that Midea could be happy with up to 49 percent of Kuka’s shares.

At the moment south German industry concern Voith is the largest single shareholder with 25.1 percent, and family entrepreneur Friedhelm Loh has 10 percent.

Voith will have a key role in deciding the future of Kuka.  One scenario is that it simply holds on to its shares, and look out for the interests of the German economy at Kuka. But a source close to Voith was skeptical: Voith is a private, family owned company, and its owners could find the generous offer from Midea irresistible.

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