German mechanical engineering group Voith [VOITH.UL] is selling its 25.1 percent stake in robotics maker Kuka to Chinese bidder Midea, paving the way for the merger to go through smoothly, people close to the deal said on Thursday.
Midea has offered 4.5 billion euros ($5.1 billion) for Kuka, making it the biggest German industrial technology company to be targeted by a Chinese buyer in a wave of deals over recent months.
Voith said it would comment on Midea’s offer in due course, declining to say whether it had already decided to tender its shares. Midea and Kuka declined to comment.
Voith’s owners resolved at a meeting on June 15 that it did not make sense strategically or financially for Voith to remain a minority shareholder alongside Midea, monthly Manager Magazin earlier reported.
Voith, which took a stake in Kuka in late 2014, will be able to roughly double its investment by selling its stake to Midea.
In an initial response to Midea’s buyout offer, the chief executive of Voith said last month that he viewed Kuka management’s positive stance toward the Midea offer as premature.
But earlier this month, Voith CEO Hubert Lienhard met senior Midea managers including CEO Paul Fang and Vice President Andy Gu in Hong Kong to discuss Midea’s Kuka offer and resolve differences, one source close to the matter said.
News of Midea’s bid for Kuka last month caused a furor among German politicians, though Midea has since said it would allow Kuka to operate independently and help it expand in China.
On a visit to Beijing this month, Chancellor Angela Merkel signaled that she would not try to prevent a takeover but also left the door open to German firms making a counter-offer.
However, no potential German or European rival bidder has emerged at this stage.
Another Kuka investor, Friedhelm Loh, had signaled in a newspaper interview that he may be willing to tender his shares.
While Loh has not said directly whether he planned to sell his 10 percent stake in Kuka to Midea, he added: “You have to ask yourself what an investment brings if you don’t have a blocking minority at least.”
(Reporting by Andreas Rinke and Alexander Hübner; Additional reporting by Denny Thomas, Arno Schuetze and Ilona Wissenbach; editing by Adrian Croft)