【Focus】What is the strategy of Midea's acquisition of KUKA?

The acquisition of “Industrie 4.0” (Industry 4.0) by the Chinese company’s major enterprise, China’s major home appliance company, Midea Group’s acquisition of German KUKA has become a blockbuster, not only in relation to the industry but also to the political sector. In August 2016, Midea Group announced that it has obtained 94.55% of the shares of KUKA through the way of TOB (public trading of stocks). The German government stated that it “does not intervene” and the acquisition is expected to be completed smoothly.

Midea Group issued a statement on implementing TOB on KUKA's shares

The enthusiasm for the development of Industry 4.0 in German companies varies widely. Among them, KUKA is one of the companies actively promoting the development of Industry 4.0. At the HannoverMesse 2016 industrial technology exhibition held in April 2016, the company put forward the slogan "HelloIndustrie4.0-wegodigital" and stated that it was the promoter of Industry 4.0.

Kukka's booth at Hannover Messe 2016

Industrial robots manufactured by KUKA will play an important role in Industry 4.0. Therefore, the news that Chinese companies acquired KUKA has brought about tremendous oscillations to the industry. However, Chinese companies are rushing to achieve “Made in China 2025” similar to Industry 4.0. In their view, the acquisition of KUKA can be said to be an extremely reasonable strategy. "China's manufacturing industry is still lagging behind developed countries in its use of low-cost mass production," said Shi Yong, deputy dean of the China Machinery Industry Information Institute. And the existence of KUKA just can make up for this lack.