Kuka and Midea sign investment agreement

FRANKFURT (Reuters) - German robotics maker Kuka KU2G.DE has signed an investor agreement with Chinese bidder Midea 000333.SZ that includes a long-term commitment to keep its existing headquarters, factories and jobs, Kuka said in a statement on Tuesday.

The logo of German industrial robot maker Kuka is pictured on a Kuka robot arm during the Hannover Fair in Hanover, Germany, April 25, 2016. REUTERS/Wolfgang Rattay

Under the agreement which is for 7-1/2 years, Midea has committed not to embark on any corporate reorganization of Kuka.

The Chinese company has also promised that it will not take any action that would lead to a delisting of Kuka, the German company said.

Midea made a 4.5 billion-euro ($4.97 billion) bid for Kuka last month, which caused a furor among German politicians. Midea has since said it would allow Kuka to operate independently and help it to expand in China.

The offer makes Kuka the biggest German industrial technology company to be targeted by a Chinese buyer in a wave of deals in recent months.

Kuka said in a separate statement that both its management and supervisory boards recommended the Midea offer and viewed the 115 euros-a-share offer as “fair”.

“Together with Midea we will be able to translate our strategy even better. At the same time we will remain a German company,” Chief Executive Till Reuter said in the statement.

It is not clear what Kuka’s main shareholders will do.

Last week sources close to the deal said that German mechanical engineering group Voith was selling its 25.1 percent stake in Kuka, although a spokesman for Voith said at the time that no decision had been taken.

Another Kuka investor, Friedhelm Loh, had signaled in a newspaper interview that he might be willing to accept.

Loh has not said directly that he plans to sell his 10 percent stake in Kuka to Midea but told German newspaper Handelsblatt: “You have to ask yourself what an investment brings if you don’t have a blocking minority at least.”

($1 = 0.9051 euros)

Reporting by Harro ten Wolde; Editing by Jane Merriman, Greg Mahlich