KUKA Systems Aerospace North America sold to U.S.-owned Advanced Integration Technology Inc.

KUKA, a large German-based supplier of intelligent automation systems, has sold its U.S. aerospace division, KUKA Systems Aerospace North America, to U.S. automation company Advanced Integration Technology Inc. The sale is the latest development in the takeover of KUKA by Chinese home appliance manufacturer, Midea.
Back in May, Midea announced an investment agreement to take over KUKA with an offer of âĴ4.57 billion (USD$5.17 billion). This offer sought to extend Mideaâs then-stake of 13.5 percent of KUKA shares to beyond thirty percent.
Just one month later, on June 16, the investment agreement was formally launched. By the time July rolled around, Midea had acquired a 76.4 percent stake in KUKA, spending a total of âĴ2.9 billion ($3.2 billion) to purchase 25 million additional shares in the German automation company.
But Midea didnât stop there.
By August 3rd, Mideaâs extended acceptance period to purchase KUKA shares ended. The Chinese company had acquired almost complete ownership of KUKA with a hefty 94.55 percent stake. Their success probably had a lot to do with their offer of âĴ115 ($127) per share, considering the trading value of âĴ107 ($119).
So, why the sale of KUKA Systems Aerospace North America? It comes down to U.S. regulations.
Two U.S. authorities, CFIUS (Committee on Foreign Investment in the United States) and DDTC (Directorate of Defense Trade Controls) are currently reviewing the Midea takeover, considering KUKAâs military and security applications in the U.S.
KUKA AG (Aerospace Group) focuses on automation in aerospace manufacturing, meaning the U.S. division is subject to U.S. aerospace security regulations.
By selling the North American KUKA AG division to a U.S.-owned company, Midea can simplify the process of obtaining regulatory approval for the takeover. This process may be hindered by the fact that, as reported by Reuters, thereâs rising opposition in Germany and the U.S. to Chinese control of strategic technologies such as intelligent automation. The push for control of such technologies is directly in line with Chinaâs Made in China 2025 policy plan to maintain Chinaâs manufacturing domination.
KUKA Systems Aerospace North America will maintain its core executive team, led by Group VP Robert Reno, despite the acquisition. Neither party has disclosed the financial terms of the sale.
For more about Made in China 2025, read What is Service-Oriented Manufacturing and Why is China Promoting it?