Owner Midea announces squeeze-out

Machine builder in robotics and automation

After withdrawing from the stock exchange, one can act more agile “freed from administrative requirements” and concentrate on the implementation of the strategy.

(Photo: dpa)

Munich A good five years after the takeover by the Chinese home appliance manufacturer Midea, the robot manufacturer Kuka is set to disappear from the stock exchange. “We now have the opportunity to raise the partnership between Kuka and Midea to a new level in order to sustainably accelerate growth,” said supervisory board chairman Andy Gu the Handelsblatt. The aim is “market leadership in the highly dynamic robotics and automation industry”.

The Chinese initiated a squeeze-out process to force the remaining shareholders out of the company. This is possible because Midea already holds more than 95 percent of the shares.

The listing on the stock exchange no longer brings any significant advantages, it said at Kuka. The share is not represented in any major indices and is hardly traded because of the small free float.

Midea took over Kuka in 2016 for more than three billion euros. The acquisition was controversial because many feared that German high technology would be sold out.

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The business of Kuka was meanwhile worse than expected, the purchase price turned out to be very high in retrospect. Long-time CEO Till Reuter had to take his hat off.

Sales increase expected

In the end, however, business went better again. “Kuka has embarked on a clear growth path this year,” CEO Peter Mohnen told Handelsblatt. According to his information, sales this year are expected to increase from just under 2.6 to 3.1 billion euros.

In the 2020 annual report, Kuka had only forecast a slight increase. This goal has now been exceeded with an increase of around 20 percent. In terms of the operating result, Mohnen expects a profit of around 60 million euros, after a loss of 113 million euros in 2020. With this, Kuka managed to return to profitability as it had promised.

Mohnen is confident about the coming years: “Robotics and automation have become indispensable globally.” In order to achieve a leading role, the group needs “a holistic portfolio, a joint product and development plan and close cross-border interlinking, for example through joint development teams” .

According to information from the Handelsblatt, the Supervisory Board made the decision to withdraw from the stock market unanimously. “We are giving up an ineffective stock exchange listing in exchange for a joint growth plan and a business vision as well as long-term commitments for Kuka with a focus on production and technologies,” said Vice-President Michael Leppek of IG Metall.

Because Kuka has also decided on a growth strategy for the coming years. “Our goal is a leading role in robot-based automation by 2025,” said CEO Mohnen. They rely on a “comprehensive portfolio with regionally adapted products and solutions for growth sectors in robotics and logistics, such as e-commerce and retail”.

A for Augsburg

However, Kuka did not announce a medium-term sales target. It just said that investments in research and development in Augsburg should be increased by 15 percent by 2025. “The ‘A’ in Kuka will continue to stand for Augsburg,” said supervisory board chairman Gu. He and Mohnen also emphasized that the guarantees for jobs and locations from the 2016 investor agreement would continue to apply.

The robotics industry had rushed from record to record for years around the world. On the one hand, this was due to the high demand from China. In addition, sectors outside of the automotive industry are also increasingly using robots.

But even before the pandemic, the boom subsided temporarily. When the Corona broke out, car manufacturers in particular, who are still the most important customers, were reluctant to invest.

But now business is up and running again. The global industry association IFR expects deliveries to increase by 13 percent to 435,000 sold robots in 2021. By 2024, sales are expected to increase further to 518,000 industrial robots sold for the first time.

Kuka’s most important competitor in Europe is ABB. The Swiss increased sales in their robotics and industrial automation division in the first nine months by a comparable twelve percent to 2.5 billion dollars. Operating income improved 63 percent to $ 291 million.

However, the ABB division recently felt the component shortage. Revenues fell slightly in the third quarter. Group boss Björn Rosengren had to lower the annual forecast for the entire group.

It will be easier for Kuka in the future. After withdrawing from the stock exchange, one can act more agile “freed from administrative requirements” and concentrate on the implementation of the strategy.

More: Record sales for robots in sight

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