Mandatory publication pursuant to sections 34, 14 paras. 2 and 3 of the German
Securities Acquisition and Takeover Act (WpüG)
Shareholders of KUKA Aktiengesellschaft, in particular those who have their place of
residence, seat or place of habitual abode in the United States of America or otherwise
outside the Federal Republic of Germany should pay particular attention to the information
contained in Section 1 “General information on the implementation of the takeover offer”
and Section 24 “Additional information for U.S. Shareholders” of the Offer Document.
Offer Document
VOLUNTARY PUBLIC TAKEOVER OFFER
(CASH OFFER)
MECCA INTERNATIONAL (BVI) LIMITED
c/o Tricor Services (BVI) Limited
P.O. Box 3340
Road Town, Tortola
British Virgin Islands
to the shareholders of
KUKA AKTIENGESELLSCHAFT
Zugspitzstra.e 140
86165 Augsburg
for the acquisition of the no-par value bearer shares held by them in
KUKA AKTIENGESELLSCHAFT
at a price of
EUR 115.00 per share of KUKA Aktiengesellschaft
Acceptance Period:
June 16, 2016 to July 15,
hrs local time Frankfurt am Main, Germany
KUKA Shares: ISIN DE
KUKA Shares Tendered for Sale: ISIN DE000A2BPXK1
TABLE OF CONTENTS
1. GENERAL INFORMATION ON THE IMPLEMENTATION OF
THE TAKEOVER OFFER ............................................................................ 6
1.1 Legal basis ............................................................................................... 6
1.2 Particular information for KUKA Shareholders whose place of
residence, seat or place of habitual abode is in the United States ........... 6
1.3 Publication of the decision to launch the Offer ....................................... 7
1.4 Review of the Offer Document by the Federal Financial
Supervisory Authority ............................................................................. 7
1.5 Publication and dissemination of the Offer Document ........................... 7
1.6 Acceptance of the Offer outside of Germany .......................................... 8
2. INFORMATION REGARDING THE STATEMENTS
CONTAINED IN THE OFFER DOCUMENT............................................. 8
2.1 General .................................................................................................... 8
2.2 Status and source of the particulars ......................................................... 8
2.3 Forward-looking statements .................................................................... 9
2.4 No updates ............................................................................................... 9
3. SUMMARY OF THE OFFER ....................................................................... 9
4. OFFER ............................................................................................................ 12
5. ACCEPTANCE PERIOD ............................................................................. 12
5.1 Duration of the Acceptance Period ........................................................ 12
5.2 Extensions of the Acceptance Period .................................................... 12
5.3 Additional Acceptance Period ............................................................... 13
6. DESCRIPTION OF THE BIDDER AND THE MIDEA GROUP ........... 14
6.1 Description of the Bidder ...................................................................... 14
6.2 Information about the Midea Group ...................................................... 14
6.3 Persons acting jointly with the Bidder ................................................... 17
6.4 KUKA Shares currently held by the Bidder or by persons acting
jointly with the Bidder and subsidia
attribution of voting rights, instruments relating to KUKA Shares ....... 17
6.5 Particulars with regard to securities transactions .................................. 18
6.6 Possible parallel acquisitions ................................................................. 18
7. DESCRIPTION OF KUKA .......................................................................... 18
7.1 Legal basis ............................................................................................. 18
7.2 Capital structure ..................................................................................... 19
7.3 Group structure and business activities ................................................. 22
7.4 Boards .................................................................................................... 22
7.5 Persons acting jointly with KUKA ........................................................ 23
8. BACKGROUND TO THE OFFER ............................................................. 23
8.1 Commercial and strategic reasons ......................................................... 23
8.2 Independence of KUKA and proposed commitments ........................... 24
9. INTENTIONS OF THE BIDDER AND MIDEA ....................................... 25
9.1 Future business activities, assets and future obligations of KUKA ...... 25
9.2 Future business activities, seat, location of material parts of the
business, use of assets and liabilities, employees and their
representatives, members of corporate bodies and changes to the
terms and conditions of employment of the Bidder and Midea ............ 27
9.3 Management Board and Supervisory Board of KUKA ......................... 27
9.4 Employees, terms and conditions of employment and employee
representation ........................................................................................ 27
9.5 Seat of KUKA; Location of significant parts of the business ............... 28
9.6 Possible structural measures .................................................................. 28
10. EXPLANATION OF PRICE DETERMINATION ................................... 29
10.1 Minimum offer price ............................................................................. 29
10.2 Appropriateness of the Offer Price ........................................................ 29
10.3 Adequacy of Offer Price ........................................................................ 31
10.4 No compensation for loss of certain rights ............................................ 32
11. ACCEPTANCE AND SETTLEMENT OF THE OFFER ......................... 32
11.1 Central Settlement Agent ...................................................................... 32
11.2 Acceptance of the Offer within the Acceptance Period ........................ 32
11.3 Stock exchange trading with KUKA Shares Tendered for Sale ............ 35
11.4 Costs of acceptance ............................................................................... 35
11.5 Reversal of the transaction in case of non-fulfilment of
Completion Conditions .......................................................................... 35
11.6 Acceptance of the Offer during the Additional Acceptance Period ...... 36
11.7 Settlement of the Offer and payment of the Offer Price ....................... 36
12. OFFICIAL APPROVALS AND PROCEEDINGS .................................... 36
12.1 Merger control proceedings ................................................................... 36
12.2 Foreign investment control proceedings ............................................... 40
12.3 Permission to publish the Offer Document ........................................... 41
13. CONDITIONS FOR COMPLETION ......................................................... 41
13.1 Completion Conditions .......................................................................... 41
13.2 Waiver of Completion Conditions ......................................................... 45
13.3 Non-fulfillment of Completion Conditions ........................................... 45
13.4 Publications with regard to Completion Conditions ............................. 46
14. FINANCING .................................................................................................. 46
14.1 Measures to ensure complete performance of the Offer........................ 46
14.2 Confirmation of financing ..................................................................... 47
15. EFFECTS OF COMPLETION OF THE OFFER ON THE NET
WORTH, FINANCIAL POSITION AND RESULTS OF THE
BIDDER AND THE MIDEA GROUP ........................................................ 47
15.1 Assumptions .......................................................................................... 47
15.2 Existing situation ................................................................................... 48
15.3 Methodology and reservations .............................................................. 48
15.4 Expected effects on the individual financial statements of the
Bidder .................................................................................................... 49
15.5 Expected effects on the consolidated financial statements of Midea .... 51
16. RIGHT OF WITHDRAWAL ....................................................................... 54
16.1 Conditions .............................................................................................. 54
16.2 Exercise of the right of withdrawal ....................................................... 54
17. INFORMATION FOR KUKA SHAREHOLDERS WHO DO NOT
WISH TO ACCEPT THE OFFER .............................................................. 55
18. CASH PAYMENTS AND VALUABLE BENEFITS FOR
MEMBERS OF THE MANAGEMENT BOARD OR THE
SUPERVISORY BOARD OF KUKA ......................................................... 56
19. NO MANDATORY OFFER ......................................................................... 56
20. FINANCIAL ADVISOR, FACILITATING BANK ................................... 56
21. TAXES ............................................................................................................ 56
22. PUBLICATIONS AND NOTIFICATIONS ................................................ 57
23. GOVERNING LAW AND PLACE OF JURISDICTION ......................... 57
24. ADDITIONAL INFORMATION FOR U.S. SHAREHOLDERS ............ 57
25. DECLARATION OF ASSUMPTION OF RESPONSIBILITY ............... 59
APPENDICES:
APPENDIX 1: Entities controlling the Bidder
APPENDIX 2: Subsidiaries of entities controlling the Bidder
APPENDIX 3: Securities Transactions of the Bidder
APPENDIX 4: Subsidiaries of KUKA
APPENDIX 5: Financing Confirmation
1. GENERAL INFORMATION ON THE IMPLEMENTATION OF THE
TAKEOVER OFFER
1.1 Legal basis
The purchase offer (the Offer) contained in this offer document (the Offer Document)
by MECCA International (BVI) Limited, which is a company limited by shares estab-
lished under the laws of the British Virgin Islands with its corporate seat in Road Town,
Tortola, British Virgin Islands and registered in the British Virgin Islands under compa-
ny registration number 1410799 (the Bidder), is a voluntary public takeover offer for
the acquisition of all no-par value bearer shares (ISIN DE) each represent-
ing a notional amount of the registered share capital of EUR 2.60 in KUKA
Aktiengesellschaft (each a KUKA Share, and together the KUKA Shares), which has its
seat in Augsburg, Federal Republic of Germany (Germany), and is registered in the
commercial register (Handelsregister) of the local court (Amtsgericht) of Augsburg un-
der HRB 22709 (KUKA and together with its subsidiaries the KUKA Group), in accord-
ance with the German Securities Acquisition and Takeover Act (Wertpapiererwerbs-
und übernahmegesetz, WpüG). The Offer relates to all KUKA Shares and will be im-
plemented solely in accordance with German law and certain applicable securities law
provisions of the United States of America (United States or U.S.).
1.2 Particular information for KUKA Shareholders whose place of residence,
seat or place of habitual abode is in the United States
The Offer relates to shares in a German company and is subject to the legal provisions
of Germany on the implementation of such an offer. These provisions differ considera-
bly from the corresponding U.S. legal provisions. For example, certain financial infor-
mation in the Offer Document has been determined in accordance with the International
Financial Reporting Standards (IFRS) adopted by the European Union and the general-
ly accepted accounting principles of the People’s Republic of China (PRC) (China
GAAP) and is therefore not comparable to financial information of U.S. companies and
other companies whose financial information is determined in accordance with the gen-
erally accepted accounting principles in the United States.
The Offer will be implemented in the United States pursuant to Section 14(e) and Regu-
lation 14E of the U.S. Securities Exchange Act of 1934, as amended (Exchange Act)
and otherwise in accordance with the provisions of the WpüG. Accordingly, the Offer
is subject to publication and other procedural requirements, including with regard to
withdrawal rights, offer period, settlement procedures and timing of payments, which
may differ from those regarding the implementation of public offers in the United States.
Pursuant to Rule 14e-5(b)(12)(i) of the Exchange Act, the Bidder may acquire, or make
arrangements to acquire, KUKA Shares other than under the Offer on or off the stock
exchange outside the United States during the period in which the Offer remains open
for acceptance, provided that such acquisitions or arrangements to acquire comply with
applicable German law, in particular the WpüG. To the extent required under German
law, information about such acquisitions or arrangements to acquire will be published in
Germany in accordance with section 23 para. 2 WpüG. Such information will also be
published by way of a non-binding English translation on the Bidder's website at
It may be difficult for shareholders of KUKA (the KUKA Shareholders, and individual-
ly, each a KUKA Shareholder) whose place of residence, seat or place of habitual
abode is in the United States (the U.S. Shareholders) to enforce their rights and claims
under U.S. securities laws, since both KUKA and the Bidder have their corporate seats
outside the United States. U.S. Shareholders may not be able to sue a company which
has its seat outside the United States, or its officers or directors who are resident outside
the United States, before a court outside the United States for violations of U.S. securi-
ties laws. Furthermore, it may be difficult to enforce the decisions of a U.S. court out-
side the United States.
1.3 Publication of the decision to launch the Offer
On May 18, 2016, the Bidder published its decision to launch the Offer in accordance
with section 10 para. 1 sentence 1 WpüG. The publication is available on the internet at
1.4 Review of the Offer Document by the Federal Financial Supervisory Au-
The German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdie BaFin) has reviewed the Offer Document in accordance
with German law and in the German language and, on June 15, 2016, has permitted its
publication. Registrations, admissions or approvals of the Offer Document and/or of the
Offer under any laws other than the laws of Germany have thus far not been made and
are not intended.
1.5 Publication and dissemination of the Offer Document
On June 16, 2016, the Bidder will publish the Offer Document in accordance with sec-
tion 14 para. 3 WpüG (i) on the internet at
(ii) by way of keeping available copies of the Offer Document free of charge through
Morgan Stanley Bank AG, Junghofstra.e 13-15, 60311 Frankfurt am Main, Germany
(request per fax +49 (0) 69 21 66 70 06 or e-mail: ). The
announcement regarding (i) the publication of the web address under which the Offer
Document will be published on the internet and (ii) the availability of copies of the Of-
fer Document free of charge in the Germany through Morgan Stanley Bank AG will be
published in the German Federal Gazette (Bundesanzeiger) on June 16, 2016. The
above-mentioned publications serve for the purpose of complying with the mandatory
provisions of the WpüG.
In addition, a non-binding English translation of the Offer Document, which has not
been reviewed by BaFin, will be published on the internet at
on June 16, 2016. Beyond the aforementioned
publications, no further publications of the Offer Document are planned.
The publication, dispatch, distribution or dissemination of the Offer Document or other
documents relating to the Offer outside the Federal Republic of Germany and the Unit-
ed States may be subject to legal restrictions. The Offer Document may be published
and distributed within the European Union or the European Economic Area in accord-
ance with the Offer Document and the applicable statutory provisions. The Offer Doc-
ument and other documents relating to the Offer may not be dispatched to, or dissemi-
nated, distributed or published by third parties in countries in which this would be ille-
Apart from the above-mentioned publications, no other publications of the Offer Docu-
ment are planned.
The Bidder will furnish the Offer Document to the respective custodian securities ser-
vices companies for dispatch to KUKA Shareholders whose place of residence, seat or
place of habitual abode is in the Federal Republic of Germany or the United States. Fur-
thermore, the custodian securities services companies may not publish, dispatch, dis-
tribute or disseminate the Offer Document unless this occurs in compliance with all ap-
plicable domestic and foreign legal requirements.
1.6 Acceptance of the Offer outside of Germany
Acceptance of the Offer outside of Germany or the United States may be subject to cer-
tain legal restrictions as a result of local regulations. KUKA Shareholders who come
into possession of the Offer Document outside of Germany or the United States, who
wish to accept the Offer outside of Germany or the United States and/or who are subject
to legal provisions other than those of Germany or the United States are advised to in-
form themselves of the relevant applicable legal provisions and to comply with them.
The Bidder assumes no responsibility for acceptance of the Offer outside of Germany or
the United States being permissible under the relevant applicable legal provisions.
2. INFORMATION REGARDING THE STATEMENTS CONTAINED IN
THE OFFER DOCUMENT
2.1 General
Except as otherwise stated, references to time in the Offer Document are references to
local time Frankfurt am Main, Germany. To the extent expressions such as “currently”,
“at the present time”, “at the moment”, “now”, “at present” or “today” are used in the
Offer Document they refer to the date of the publication of the Offer Document, i.e.,
June 16, 2016, except as otherwise expressly stated.
References in the Offer Document to a “banking day” relate to a day on which the
banks in Frankfurt am Main, Germany, are open for general business. References to
“EUR” relate to the legal currency of Germany, references to “USD” relate to the legal
currency of the United States and references to “RMB” refer to the legal currency of the
The Bidder has not authorized third parties to make statements about the Offer or the
Offer Document. If third parties nevertheless make such statements, these shall neither
be attributable to the Bidder nor to persons acting jointly with the Bidder.
2.2 Status and source of the particulars
The information about KUKA Group contained in the Offer Document is based on cer-
tain publicly accessible sources of information (e.g., published annual financial state-
ments, analyst presentations and press announcements). As far as the Offer Document
contains financial information about KUKA Group, such information is based on the
data and information contained in KUKA’s consolidated annual report for the financial
year ending December 31, 2015. The information obtained from publicly accessible
sources has not been verified by the Bidder.
2.3 Forward-looking statements
The Offer Document and documents referred to in it contain certain forward-looking
statements. Such statements are, in particular, indicated by terms such as “expects”,
“believes”, “is of the opinion”, “attempts”, “estimates”, “intends”, “assumes” and “en-
deavors”. Such statements express current intentions, views, expectations, estimates and
forecasts with regard to possible future events. They are, inter alia, based on certain as-
sumptions, assessments and forecasts, subject to risks and uncertainties and therefore
they may turn out to be incorrect. In particular, the Bidder emphasizes that the effects of
the acquisition of the KUKA Shares on the future net worth, financial position and re-
sults of the Bidder and the Midea Group (as defined in Section 6.2 of this Offer Docu-
ment) cannot be predicted. The information contained in Section 15 of this Offer Doc-
ument is based on the Bidder's preliminary and untested assessments, which may differ
from the actual financial results of the Bidder, the Midea Group or the KUKA Group.
It is possible that the Bidder will change its intentions and evaluations stated in the Of-
fer Document, especially with regard to the KUKA Group, after the publication of the
Offer Document.
2.4 No updates
The Bidder will update the Offer Document or adjust it to reflect future events and de-
velopments only to the extent that this is permitted pursuant to the WpüG and legally
3. SUMMARY OF THE OFFER
Notice: The following summary contains an overview of certain particulars set out in
the Offer Document. It is supplemented by, and should be read in conjunction with,
the information and particulars set out elsewhere in the Offer Document. This
summary does not, therefore, contain all information that may be relevant for KUKA
Shareholders. For this reason, KUKA Shareholders should read the entire Offer
Document carefully.
MECCA International (BVI) Limited, c/o Tricor Services
(BVI) Limited, P.O. Box 3340, Road Town, Tortola, British
Virgin Islands, a member of the Midea Group.
Target company:
KUKA Aktiengesellschaft, Zugspitzstra.e 140, 86165
Augsburg, Germany.
Subject-matter:
Acquisition of all no-par value bearer shares in KUKA,
which are not held directly by the Bidder, each representing a
notional amount of the registered share capital of EUR 2.60
(including all ancillary rights (in particular dividend rights)
which exist at the time of settlement of the Offer).
Offer Price:
EUR 115.00 per KUKA Share.
Acceptance Period:
June 16, 2016 until July 15,
hrs local time
Frankfurt am Main, Germany.
Additional
Acceptance Period:
The expected first day of the Additional Acceptance Period
(as defined in Section 5.3 of this Offer Document) is July 21,
2016 and in this case the last day is August 3,
hrs local time Frankfurt am Main, Germany.
Acceptance:
Acceptance must be declared in writing during the
Acceptance Period or the Additional Acceptance Period to
the relevant Custodian Bank (as defined in Section 11.2 of
this Offer Document). Acceptance will take effect once the
KUKA Shares are rebooked in due time to
ISIN DE000A2BPXK1.
Acceptance of the Offer through a Custodian Bank with
corporate seat in Germany (including a German branch of a
foreign Custodian Bank) is free of costs and expenses for the
KUKA Shareholders, with the exception of the costs for
transmitting the acceptance statement to the respective
Custodian Bank. Fees, costs and expenses of foreign
Custodian Banks as well as any foreign stock exchange,
value added or stamp taxes resulting from the acceptance of
the Offer are to be borne by the accepting KUKA
Shareholder.
Completion
Conditions:
Completion of the Offer and of the agreements which come
into existence as a result of acceptance of the Offer is subject
to the Completion Conditions set out in Section 13.1 of this
Offer Document. These can be summarized as follows:
. achievement of a Minimum Acceptance Threshold (as
defined in Section 13.1.1 of this Offer Document) of
30% of all KUKA Shares,
. granting of certain merger clearances (see Section
13.1.2 of this Offer Document),
. granting of certain foreign investment control clearanc-
es (see Section 13.1.3 of this Offer Document),
. no capital measures or specified amendments of the ar-
ticles of association of KUKA (see Section 13.1.4 of
this Offer Document),
. no loss of half of the share capital and no insolvency of
KUKA (see Section 13.1.5 of this Offer Document).
If at the relevant time all Completion Conditions (as defined
in Section 13.1 of the Offer Document) have neither been
satisfied nor have become obsolete due to a valid waiver de-
clared by the Bidder, or if any of the Completion Conditions
becomes incapable of being satisfied at an earlier point in
time – provided that a waiver is not possible anymore, the
Offer will lapse and the agreements which come into exist-
ence as a result of accepting the Offer will not be completed
and will terminate (conditions subsequent).
Stock exchange
The KUKA Shares Tendered for Sale (as defined in Section
11.2.1(b) of this Offer Document) will be traded on the
regulated market (Regulierter Markt) (Prime Standard) of the
Frankfurt Stock Exchange (Frankfurter Wertpapierb.rse)
under their new ISIN DE000A2BPXK1 after the start of the
Acceptance Period until three trading days before the
expected settlement of the Offer.
KUKA Shares:
KUKA Shares Tendered for Sale:
ISIN DE000A2BPXK1
Publications:
The Offer Document will be published on June 16, 2016
(i) on the internet together with a non-binding English
translation at
as (ii) by making copies of the Offer Document and its non-
binding English translation available free of charge through
Morgan Stanley Bank AG, Junghofstra.e 13-15, 60311
Frankfurt am Main, Germany (request per fax +49 (0) 69 21
66 70 06 or e-mail: ). The
announcement regarding (i) the publication of the web
address under which the Offer Document will be published
on the internet and (ii) the availability of copies of the Offer
Document free of charge in the Federal Republic of Germany
through Morgan Stanley Bank AG will be published in the
German Federal Gazette (Bundesanzeiger) on June 16, 2016.
All notifications and announcements in conjunction with this
Offer which are required pursuant to the WpüG will be
published together with a non-binding English translation at
. Notifications and
announcements pursuant to the WpüG will also be published
in the German Federal Gazette (Bundesanzeiger).
Settlement:
The settlement of the Offer for all KUKA Shares Tendered
for Sale (regardless of whether the Offer has been accepted
within the Acceptance Period or the Additional Acceptance
Period) occurs as set forth in Section 11.7 of this Offer
Document promptly after the end of the Additional
Acceptance Period, but no earlier than four banking days and
no later than eight banking days after expiry of the
Additional Acceptance Period and fulfillment of the
Completion Conditions (as defined in Section 13.1 of this
Offer Document) which the Bidder has not validly waived in
accordance with section 21 para. 1 no. 4 WpüG.
The processing of the Offer and the payment of the Offer
Price to the accepting KUKA Shareholders can be delayed
until after March 31, 2017 due to the required regulatory
clearances (see Section 13.1.2 to 13.1.3 of this Offer
Document), or will not take place at all in the event of lapse
of the Offer.
The Bidder hereby offers to purchase all KUKA Shares including all ancillary rights (in
particular dividend rights) existing at the time of settlement of the Offer at a purchase
price (Offer Price) of
EUR 115.00 per KUKA Share
subject to the terms and conditions set forth in the Offer Document.
The subject of the Offer are all KUKA Shares that are not held directly by the Bidder.
5. ACCEPTANCE PERIOD
5.1 Duration of the Acceptance Period
The acceptance period of the Offer begins upon publication of the Offer Document on
June 16, 2016
and will end on
hrs local time Frankfurt am Main, Germany.
The settlement of the Offer after acceptance is described in Section 11.7 of this Offer
5.2 Extensions of the Acceptance Period
Under the circumstances set out below, the acceptance period of the Offer will in each
case automatically be extended as follows:
(a) In the event of an amendment of the Offer pursuant to section 21 WpüG within
the last two weeks before expiry of the acceptance period of the Offer referred to
in Section 5.1 of this Offer Document, the acceptance period of the Offer pursu-
ant to Section 5.1 of this Offer Document will be extended by two weeks (sec-
tion 21 para. 5 WpüG), i.e., in this case the acceptance period will end on Ju-
hrs local time Frankfurt am Main, Germany. This shall apply
even if the amended Offer contravenes legal provisions.
(b) If during the acceptance period of the Offer a competing offer is made by a third
party (the Competing Offer) and if the acceptance period for the Offer expires
prior to the expiry of the acceptance period for the Competing Offer, the expiry
of the acceptance period for the Offer shall be determined by the expiry of the
acceptance period of the Competing Offer (section 22 para. 2 WpüG). This shall
apply even if the Competing Offer is amended or enjoined or contravenes legal
provisions.
(c) If a general shareholders’ meeting of KUKA is called in connection with the Of-
fer after publication of the Offer Document, the acceptance period will be ten
weeks from the publication of the Offer Document pursuant to section 16 para. 3
WpüG. The acceptance period would then run until August 25,
hours hrs local time Frankfurt am Main.
The acceptance period of the Offer, including all extensions of such period in accord-
ance with provisions of the WpüG (but excluding the Additional Acceptance Period
defined in Section 5.3 of this Offer Document), is hereinafter collectively referred to as
the Acceptance Period. With regard to the right of withdrawal in the event of an
amendment of the Offer or the launching of a Competing Offer, see the statements con-
tained in Section 16 of this Offer Document.
5.3 Additional Acceptance Period
KUKA Shareholders who have not accepted the Offer within the Acceptance Period
may still accept it in accordance with, and subject to the conditions of, section 16 para.
2 WpüG within two weeks after publication of the results of the Offer by the Bidder
pursuant to section 23 para. 1 sentence 1 no. 2 WpüG (the Additional Acceptance Pe-
riod), unless non-fulfillment of any of the Completion Conditions (as defined in Section
13.1 of this Offer Document) has manifested itself by the end of the Acceptance Period
(provided that it is not required for the Additional Acceptance Period that the Comple-
tion Conditions in Sections 13.1.2 and 13.1.3 of this Offer Document have already been
fulfilled by the end of the Acceptance Period as they may also be fulfilled at a later
point in time, see Sections 13.1.2 and 13.1.3 of this Offer Document) to the extent that
such Completion Condition has not been validly waived. The possibility of accepting
the Offer during the Additional Acceptance Period only exists if the Completion Condi-
tion of obtaining the Minimum Acceptance Threshold (see Section 13.1.1 of this Offer
Document) is fulfilled before the expiry of the Acceptance Period, unless this condition
has validly been waived. The Minimum Acceptance Threshold may also be reduced.
After the Additional Acceptance Period expires, the Offer can no longer be accepted
(except in the case of a sell-out right pursuant to section 39c WpüG, see Section 17(d)
of this Offer Document).
The results of the Offer are expected to be published pursuant to section 23 para. 1 sen-
tence 1 no. 2 WpüG within three banking days after expiry of the Acceptance Period,
i.e., on July 20, 2016. The Additional Acceptance Period is therefore expected to com-
mence on July 21, 2016 and to end on August 3,
hrs local time Frankfurt
am Main, Germany.
The settlement of the Offer is described in Section 11.7.
6. DESCRIPTION OF THE BIDDER AND THE MIDEA GROUP
6.1 Description of the Bidder
The Bidder is a company limited by shares incorporated under the laws of the British
Virgin Islands and registered in the British Virgin Islands under company registration
number 1410799. The registered share capital of the Bidder amounts to USD 10,000.
The financial year of the Bidder is the calendar year.
The Bidder was incorporated on June 12, 2007. The Bidder acts as an offshore invest-
ment and holding company for Midea (as defined in Section 6.2 of this Offer Document)
and has made equity investments in a series of companies. One of these equity invest-
ments has been the previous acquisition of KUKA Shares (see Section 6.4 of this Offer
Document). The Bidder does not have any employees and its sole director is Mr. Feide
Li who has the power to solely represent the Bidder.
The sole shareholder of the Bidder is Midea International Corporation Company Lim-
ited, a company limited by shares established under the laws of Hong Kong and regis-
tered with the Companies Registry of Hong Kong under company number 913897
(Midea International).
The current shareholder structure of the Bidder may be illustrated by the following chart:
Midea Group Co., Ltd.
Midea International Corporation
Company Limited(Hong Kong)
MECCA International (BVI) Limited(British Virgin Islands)
6.2 Information about the Midea Group
Midea Group Co., Ltd., a joint stock company established under the laws of the PRC
(Midea, together with its subsidiaries the Midea Group), is a leading consumer appli-
ances manufacturer in the PRC with global presence and principally engaged in the
manufacturing and sale of household appliances, with core business segments spanning
across air conditioners, refrigerators, washing machines, small household appliances,
motors and logistics. Midea is a publicly listed company traded on the Shenzhen Stock
Exchange under stock .
As a publicly listed company, Midea is subject to the provisions of the securities laws of
the PRC, the administrative provisions issued by the China Securities Regulatory
Commission (CSRC) and the rules of Shenzhen Stock Exchange. In accordance with
these provisions, in particular the ”Administrative Measures on the Material Asset Re-
structuring of Listed Companies“ issued by the CSRC, a material asset restructuring
(MAR) of a listed PRC company requires the approval of its general meeting. A MAR
is triggered, inter alia, in case of a major acquisition or equity investment by a listed
PRC company or one of its subsidiaries. As the Offer constitutes such a major acquisi-
tion and thereby a MAR, an extraordinary general meeting was held by Midea on June 6,
2016, and approved the Offer.
Midea has approx. 200 subsidiaries worldwide. As of December 31, 2015, Midea Group
had approx. 93,200 employees (December 31, 2014: approx. 108,120 employees)
worldwide. In its financial year ending on December 31, 2015 (Financial Year 2015),
Midea generated consolidated operating revenues of approx. RMB 138.4 billion (finan-
cial year ending on December 31, 2014 (Financial Year 2014): approx. RMB 141.7
billion) and consolidated earnings of approx. RMB 12.7 billion (net income attributable
to shareholders of Midea) (Financial Year 2014: approx. RMB 10.5 billion (net income
attributable to shareholders of Midea)).
Applying an exchange rate of RMB 1 : EUR 0.14444 in its Financial Year 2015 (aver-
age exchange rate for the financial year from January 1 until December 31, 2015 taken
from the website ) (Exchange Rate 2015)), Midea generated
consolidated operating revenues of approx. EUR 20.0 billion (Financial Year 2014:
approx. EUR 17.4 billion, applying an exchange rate of 1 RMB : 0.12257 EUR (average
exchange rate for the financial year from January 1 until December 31, 2014 taken from
the website ) (Exchange Rate 2014)) and consolidated earnings
of approx. EUR 1.8 billion (net income attributable to shareholders of Midea) applying
the Exchange Rate 2015 (Financial Year 2014: approx. EUR 1.3 billion (net income at-
tributable to shareholders of Midea), applying the Exchange Rate 2014).
Midea’s strategy is focused on developing a portfolio of successful products and solu-
tions that improve the quality of people’s lives and enhance its industrial customers’
productivity and infrastructure. With the support of KUKA, Midea intends to advance a
joint development of service robotics and to strengthen its manufacturing capabilities
through automation and its position in logistics and warehouse services.
Midea currently operates in six business segments: (i) Air-Conditioners, (ii) Refrigera-
tors, (iii) Washing Machines, (iv) Small Household Appliances, (v) Motors and (vi) Lo-
(i) Air-Conditioners
The Air-Conditioners segment produces and sells a wide range of residential-use air
conditioners, inter alia, split, window, portable, dehumidifiers and light commercial
models. In addition, it also produces commercial-use air conditioners for customers all
over the world. The air conditioners are sold under the Midea. brand.
Midea generated consolidated operating revenues of approx. RMB 71.1 billion in the
Air Conditioners segment in the Financial Year 2015 (Financial Year 2014: approx.
RMB 80.9 billion). Applying the Exchange Rate 2015, Midea generated consolidated
operating revenues of approx. EUR 10.3 billion in the Air-Conditioners segment in the
Financial Year 2015 (Financial Year 2014: approx. EUR 9.9 billion, applying the Ex-
change Rate 2014).
(ii) Refrigerators
The Refrigerators segment produces and sells high-end multi-door, side by side refrig-
erators as well as traditional single and double door refrigerators. In addition, the seg-
ment also produces smart refrigerators equipped with an intelligent refrigerator man-
agement system which can be linked and operated through a smartphone application.
The refrigerators are sold under the Midea. brand.
Midea generated consolidated operating revenues of approx. RMB 12.3 billion in the
Refrigerators segment in the Financial Year 2015 (Financial Year 2014: approx. RMB
9.9 billion). Applying the Exchange Rate 2015, Midea generated consolidated operating
revenues of approx. EUR 1.8 billion in the Refrigerators segment in the Financial Year
2015 (Financial Year 2014: approx. EUR 1.2 billion, applying the Exchange Rate 2014).
(iii) Washing Machines
The Washing Machines segment produces and sells front and top loading washing ma-
chines for consumers and commercial customers. The washings machines are sold un-
der the Midea. and LittleSwan. brands.
Midea generated consolidated operating revenues of approx. RMB 13.2 billion in the
Washing Machines segment in the Financial Year 2015 (Financial Year 2014: approx.
RMB 10.9 billion). Applying the Exchange Rate 2015, Midea generated consolidated
operating revenues of approx. EUR 1.9 billion in the Washing Machines segment in the
Financial Year 2015 (Financial Year 2014: approx. EUR 1.3 billion, applying the Ex-
change Rate 2014).
(iv) Small Household Appliances
The Small Household Appliances segment produces and sells kitchen appliances such
as microwaves, rice cookers, induction cookers, dishwashers, water heaters and extrac-
tor hoods, and lifestyle appliances such as vacuum cleaners, electric fans, water purifi-
ers and water fountains. The small household appliances are sold under the Midea.
Midea generated consolidated operating revenues of approx. RMB 36.3 billion in the
Small Household Appliances segment in the Financial Year 2015 (Financial Year 2014:
approx. RMB 33.6 billion). Applying the Exchange Rate 2015, Midea generated consol-
idated operating revenues of approx. EUR 5.2 billion in the Small Household Applianc-
es segment in the Financial Year 2015 (Financial Year 2014: approx. EUR 4.1 billion,
applying the Exchange Rate 2014).
(v) Motors
The Motors segment produces and sells motors for home appliances, cleaning machines
and pumps as well as industrial motors, direct current motors, servo motors and motor
accessories. The motors are sold under the Welling. brand.
Midea generated consolidated operating revenues of approx. RMB 3.8 billion in the
Motors segment in the Financial Year 2015 (Financial Year 2014: approx. RMB 4.5 bil-
lion). Applying the Exchange Rate 2015, Midea generated consolidated operating reve-
nues of approx. EUR 0.6 billion in the Motors segment in the Financial Year 2015 (Fi-
nancial Year 2014: approx. EUR 0.5 billion, applying the Exchange Rate 2014).
(vi) Logistics
The Logistics segment offers comprehensive logistics services such as storage services,
express courier services, distribution services, cold chain logistics and e-commerce lo-
gistics. The Logistics segment is operated through Annto Logistics Co., Ltd. (Annto
Logistics), which is a wholly-owned subsidiary of Midea.
Midea generated consolidated operating revenues of approx. RMB 1.7 billion in the Lo-
gistics segment in the Financial Year 2015 (Financial Year 2014: approx. RMB 2.0 bil-
lion). Applying the Exchange Rate 205, Midea generated consolidated operating reve-
nues of approx. EUR 0.2 billion in the Logistics segment in the Financial Year 2015
(Financial Year 2014: approx. EUR 0.2 billion, applying the Exchange Rate 2014).
6.3 Persons acting jointly with the Bidder
The companies listed in Appendix 1 (the Controlling Companies) control the Bidder at
the time of publication of the Offer Document. The companies listed in Appendix 2 are
subsidiaries of one or more of the companies listed in Appendix 1 at the time of publi-
cation of the Offer Document. All companies listed in Appendix 1 and Appendix 2 are
therefore deemed to be persons acting jointly with the Bidder and among each other
pursuant to section 2 para. 5 sentence 3 WpüG.
Except for Midea and Midea International Corporation Company Limited, who each
coordinate their conduct with the Bidder with regard to the acquisition of KUKA Shares,
none of the companies which, as a matter of German law, are deemed to constitute per-
sons acting jointly with the Bidder and among each other pursuant to section 2 para. 5
sentence 3 WpüG actually coordinate their conduct with the Bidder with regard to their
acquisition of KUKA Shares or the exercise of voting rights attached to KUKA Shares
on the basis of an agreement or otherwise within the meaning of section 2 para. 5 sen-
tence 1 WpüG.
There are no further persons acting jointly with the Bidder pursuant to section 2 para. 5
6.4 KUKA Shares currently held by the Bidder or by persons acting jointly
with the Bidder and subsidia attribution of voting
rights, instruments relating to KUKA Shares
On the date of publication of the Offer Document, the Bidder holds 5,372,196 KUKA
Shares (the Held KUKA Shares), i.e., approx. 13.5% of the issued share capital and vot-
ing rights in KUKA.
On the date of publication of this Offer Document, neither the Bidder nor other persons
acting jointly with the Bidder within the meaning of section 2 para. 5 WpüG or any of
their subsidiaries hold any further shares or voting rights in KUKA.
On the date of publication of this Offer Document, voting rights from the Held KUKA
Shares shall be attributed to Midea and Midea International in accordance with sec-
tion 30 para. 1 sentence 1 no. 1, sentence 3 WpüG. Other than this, on the date of pub-
lication of this Offer Document, no other voting rights from KUKA Shares will be at-
tributed to the Bidder or to persons acting jointly with it pursuant to section 30 para. 1
or para. 2 WpüG.
Neither the Bidder nor any person acting jointly with the Bidder within the meaning of
section 2 para. 5 WpüG nor any of their subsidiaries hold, directly or indirectly, any
instruments within the meaning of section 25 of the German Securities Trading Act
(Wertpapierhandelsgesetz, WpHG) and, accordingly, no other percentage of voting
rights with respect to KUKA to be notified pursuant to sections 25, 25a WpHG.
6.5 Particulars with regard to securities transactions
In the six-month period prior to the date of the announcement of the Bidder’s decision
to launch the Offer on May 18, 2016 until the date of the publication of the Offer Doc-
ument, i.e., June 16, 2016, the Bidder has acquired 2,345,273 KUKA Shares, i.e.,
approx. 5.9% of the issued share capital and voting rights in KUKA. Further details are
stated in Appendix 3.
Except for these transactions, neither the Bidder nor any persons acting jointly with the
Bidder within the meaning of section 2 para. 5 WpüG, nor any of their subsidiaries ac-
quired or entered into agreements with respect to the acquisition of KUKA Shares in the
period beginning six months prior to the announcement of the Bidder to launch the offer
and ending June 16, 2016 (the date of the publication of the Offer Document).
6.6 Possible parallel acquisitions
To the extent permissible under applicable law, the Bidder reserves the right to directly
or indirectly acquire additional KUKA Shares outside the Offer on or off the stock ex-
change. To the extent necessary under the laws of the Federal Republic of Germany, the
United States or other relevant jurisdictions, information about these acquisitions or re-
spective agreements will be published in accordance with applicable legal provisions in
particular section 23 para. 2 WpüG in conjunction with section 14 para. 3 sentence 1
WpüG. The relevant information will also be published in a nonbinding English trans-
lation on the internet at .
7. DESCRIPTION OF KUKA
7.1 Legal basis
KUKA is a stock corporation incorporated under German law with its corporate seat in
Augsburg, Germany, registered with the commercial register (Handelsregister) of the
local court (Amtsgericht) of Augsburg under HRB 22709. The financial year of KUKA
is the calendar year.
The corporate purpose of KUKA as stipulated in its articles of association is the man-
agement of a group of companies in Germany and abroad, which focus their business
activities on the development, construction, production, distribution and service of in-
dustrial robots, robot-based products and applications as well as other handling systems
and trading with products in the
development, planning, con-
struction, production, formation, distribution, operation and service of plants, including
industrial plants, of automated assembly and production technology machines and tools
as well as trading with products in the
performance of services of
all kind, in particular in real estate and property management, IT, human resources
management and fleet management of commercial companies. KUKA may also carry
out the aforementioned activities by its own and is entitled to enter into all transactions
and take all measures in connection with its corporate purpose or that it deems benefi-
for this purpose KUKA may also establish, acquire or participate in other domestic
or foreign enterprises. KUKA may also acquire the fixed assets and equipment required
for the production, distribution or trade of the aforementioned products. KUKA may
combine companies, in which KUKA holds a majority participation, under its manage-
ment or restrict itself to their management.
According to section 22 para. 1 of the articles of association of KUKA, resolutions of
the general meeting of KUKA are adopted with a simple majority of the votes cast and,
if the law requires a majority of the capital in addition to the majority of the votes, with
the simple majority of the share capital represented during the resolution, in either case
unless mandatory legal provisions require otherwise.
The KUKA Shares are admitted to trading on the regulated market (Regulierter Markt)
of the Frankfurt Stock Exchange (Frankfurter Wertpapierb.rse) (Prime Standard) and
of the Munich Stock Exchange.The KUKA Shares are included in the share index
7.2 Capital structure
As of the date of the Offer Document, the registered share capital of KUKA amounts to
EUR 103,416,222 and is divided into 39,775,470 no-par value bearer shares, each rep-
resenting a notional amount of the registered share capital of EUR 2.60 per KUKA
7.2.1 Authorized Capital
Pursuant to section 4 para. 5 of the articles of association of KUKA, the management
board of KUKA is authorized, with the consent of the supervisory board, to increase the
registered share capital by up to EUR 46,420,808.20 in aggregate in the time period up
to June 9, 2020 by the issue, once or several times, of new no-par value bearer shares in
return for contributions in cash and/or in kind (Authorized Capital 2015). The share-
holders shall be granted subscription rights. The new shares may be subscribed for by
one or several banks or companies operating pursuant to section 53 para. 1 sentence 1 or
section 53b para.1 sentence 1 or para. 7 of the German Banking Act (Gesetz über das
Kreditwesen) determined by the management board with the obligation to offer them to
the shareholders (indirect subscription right).
However, the management board of KUKA is authorized, subject to approval by the
supervisory board, to exclude fractional amounts from shareholder subscription rights
and to exclude shareholder subscription rights if a capital increase in exchange for con-
tributions in kind takes place for the purpose of acquiring companies or parts of compa-
nies or interests in companies or other assets (including third-party claims against
KUKA). Subject to approval by the supervisory board, the management board of
KUKA is further authorized to exclude shareholder subscription rights in the event of
Authorized Capital 2015 being used once or several times in exchange for cash contri-
butions in an amount not exceeding 10% of the existing share capital at the time the Au-
thorized Capital 2015 came into effect and – if this value is lower – at the time the Au-
thorized Capital 2015 is exercised, in order to issue the new shares at a price that is not
significantly lower than the price of KUKA’s shares already quoted on the stock ex-
change at the time the new share issue price is finalized. Shares sold as a result of, and
during the term of, the authorization granted at the annual general meeting of May 28,
2014 in accordance with section 71 para. 1 no. 8 sentence 5 of the German Stock Cor-
poration Act (Aktiengesetz, AktG) in conjunction with section 186 para. 3 sentence 4
AktG count towards the aforementioned 10% threshold. Furthermore, the 10% thresh-
old also includes shares issued for the purpose of servicing warrant or convertible bonds,
participation rights or participating bonds or a combination of these instruments, pro-
vided that these instruments were issued as a result of, and during the term of, an au-
thorization granted at the annual general meeting of May 28, 2014 in accordance with
the analogous application of section 186 para. 3 sentence 4 AktG.
The management board of KUKA, subject to approval by the supervisory board, is only
permitted to use the aforementioned authorization to exclude shareholder subscription
rights to the extent that the pro rata amount of the total shares issued under exclusion of
subscription rights does not exceed 20% of the share capital at the time the authoriza-
tion becomes effective or of the existing share capital at the time this authorization is
exercised, should this amount be less. In each case, the management board of KUKA is
authorized, subject to approval by the supervisory board, to stipulate other details re-
garding the capital increase and its execution, in particular with regard to share rights
and the terms and conditions relating to the issuance of shares.
7.2.2 Conditional Capital
KUKA’s articles of association set forth the following three conditional capitals.
(a) Conditional Capital 2010
The share capital of KUKA is conditionally increased by up to EUR 2,958.80
through the issuance of up to 1,138 bearer shares (Conditional Capital 2010).
The conditional capital increase shall only be carried out if and to the extent that
the holders of the convertible bonds issued in return for cash contributions on
February 12, 2013 exercise their conversion rights in accordance with the terms
and conditions of such bonds. The new shares shall be issued at the relevant
conversion price applicable in each case under the terms and conditions of such
bonds. The new shares shall provide an entitlement to profit participation start-
ing from the beginning of the financial year in which they
however, this shall not apply to past financial years, even if profits have not yet
been distributed for any such years. The management board of KUKA is author-
ized, subject to the approval of the supervisory board, to determine the remain-
ing details of the execution of the conditional capital increase.
The respective convertible bonds have, however, been canceled by KUKA as of
March 24, 2016 and all obligations under such bonds have been fulfilled.
(b) Conditional Capital 2013
The share capital is conditionally increased by up to EUR 25,789.40 through the
issuance of up to 9,919 no-par value bearer shares (Conditional Capital 2013).
The conditional capital increase shall only be carried out if and to the extent that
the holders of the convertible bond issued in return for cash contributions on Ju-
ly 26, 2013 exercise their conversion rights in accordance with the terms and
conditions of such bonds. The new shares shall be issued at the relevant conver-
sion price applicable in each case under the terms and conditions of such bonds.
The new shares shall provide an entitlement to profit participation starting from
the beginning of the financial year in which they however,
this shall not apply to past financial years, even if profits have not yet been dis-
tributed for any such years. The management board of KUKA shall be author-
ized, subject to the approval of the supervisory board, to determine the remain-
ing details of the execution of the conditional capital increase.
The respective convertible bonds have, however, been canceled by KUKA as of
March 24, 2016 and all obligations under such bonds have been fulfilled.
(c) Conditional Capital 2014
The share capital of KUKA is conditionally increased by up to
EUR 33,486,707.80, divided into up to 12,879,503 no-par value bearer shares
(Conditional Capital 2014). The conditional capital increase will only be carried
out to the extent that holders or creditors of option or conversion rights or con-
version or option obligations exercise their option or conversion rights in ex-
change for cash for options and/or convertible bonds, participation rights or par-
ticipating bonds (or a combination of these instruments), issued or guaranteed by
KUKA or a KUKA Group company until May 27, 2019 as a result of the author-
ization granted to the management board by shareholders at the annual general
meeting of May 28, 2014, or, to the extent they were obliged to exercise their
conversion or option rights, fulfill their conversion or option obligations, or to
the extent that KUKA exercises its option to wholly or partially grant shares of
KUKA instead of paying the monies due, provided no cash settlement or treas-
ury shares or shares of another listed company are used to service the bonds. The
new shares will be issued at the option or conversion price to be determined in
accordance with the authorization resolution. The new shares will participate in
the profits as of the beginning of the fiscal year in which they are created. The
management board of KUKA is authorized, subject to approval of the superviso-
ry board, to define the further details of the execution of the conditional capital
So far, KUKA has not issued any conversion or option rights on the basis of the
Conditional Capital 2014.
7.3 Group structure and business activities
KUKA is the parent company of the KUKA Group. Pursuant to the information availa-
ble to the Bidder at the time of publication of the Offer Document, the companies listed
in Appendix 4 are subsidiaries of KUKA. The KUKA Group develops and manufac-
tures industrial robots and robot-based automation solutions as well as other production
machinery and equipment and offers production engineering services and logistics ser-
vices. KUKA Group operates in a total of 30 countries on three continents.
In the financial year 2015, the KUKA Group, with 12,300 employees (year-end), gener-
ated consolidated revenues of approx. EUR 3 billion according to the most recent annu-
al report.
The business activities of the KUKA Group are divided into the following three seg-
ments: (i) Robotics, (ii) Systems and (iii) Swisslog.
(i) Robotics
In the Robotics segment, KUKA develops and manufactures high-quality industrial ro-
bots for a wide range of industries, such as six-axis robots, palletizers, cleanroom robots,
heat-resistant robots, welding robots, press-to-press robots, shelf-mounted robots and
high-accuracy robots. The segment generated revenues of approx. EUR 910 million in
the Financial Year 2015.
(ii) Systems
In the Systems segment, KUKA offers products and services in the field of joining and
forming processes for a wide range of materials as well as automated production and
assembly solutions for industrial manufacturing. This segment generated revenues of
approx. EUR 1.47 billion in the Financial Year 2015.
(iii) Swisslog
In the Swisslog segment, KUKA’s subsidiary Swisslog Holding AG (Swisslog) offers
warehouse and distribution automation solutions as well as automation solutions for the
healthcare industry. In the Financial Year 2015, the segment generated revenues of
approx. EUR 620 million.
7.4 Boards
The management board of KUKA consists of Dr. Till Reuter (Chief Executive Officer)
and Peter Georg Mohnen (Chief Financial Officer) (Management Board).
The supervisory board of KUKA consists of twelve members (Supervisory Board). Six
of these members are appointed by the general meeting and six members are elected by
the employees in accordance with the provisions of the German Co-Determination Act
(Mitbestimmungsgesetz). The current members of the supervisory board are Bernd
Minning, Michael Leppek*, Prof. Dr. Dirk Abel, Wilfried Eberhardt*, Siegfried
Greulich*, Dr. Constanze Kurz*, Armin Kolb*, Carola Leitmeir*, Dr. Hubert Lienhard,
Dr. Friedhelm Loh, Prof. Dr. Uwe Loos, and Hans Ziegler.
(.Employee representatives)
The current chairman of the supervisory board of KUKA is Bernd M the current
deputy chairman of the supervisory board is Michael Leppek.
7.5 Persons acting jointly with KUKA
According to the information available to the Bidder at the time of publication of the
Offer Document, the companies listed in Appendix 4 are subsidiaries of KUKA and are
therefore as a matter of German law, deemed to constitute persons acting jointly with
KUKA and among each other pursuant to section 2 para. 5 sentence 2 together with sen-
tence 3 WpüG. According to the information available to the Bidder at the time of pub-
lication of the Offer Document, there are no other persons which are deemed to act
jointly with KUKA and among each other pursuant to section 2 para. 5 sentence 2
8. BACKGROUND TO THE OFFER
8.1 Commercial and strategic reasons
On May 18, 2016 the Bidder has announced its intention to launch a voluntary public
takeover offer for all shares of KUKA (the Transaction). The decision confirmed
Midea’s previously stated intention to increase its shareholding in KUKA.
While Midea is convinced of KUKA’s prosperous future, Midea strongly believes that a
closer cooperation with Midea, manifested, inter alia, by a larger shareholding of Midea,
will accelerate KUKA’s growth even further.
Midea has identified strategic initiatives that should allow KUKA to outperform its am-
bitious revenue target of EUR 4.0-4.5 billion by 2020 of which EUR 1.0 billion is ex-
pected to come from China. These relate to (i) broadening KUKA’s product offering to
address China’s robotics market potential, (ii) Midea supporting KUKA on the supply
chain and distribution for its manufacturing initiatives in China, (iii) fostering the col-
laboration between KUKA and Midea in logistics and (iv) leveraging Midea’s under-
standing of customer needs to establish the service robotics business as a future pillar
(i) Broaden KUKA’s product offering to address China’s robotics market potential
Robot penetration in general industries in China is still extremely low – approx. 17 per
10,000 workers – which is particularly low compared to global leaders South Korea and
Japan (approx. 365 and 211 per 10,000 workers, respectively). KUKA is seeking to de-
velop a broader product offering across the value chain to address the Chinese market’s
needs for robotics products especially in general industries (including low and mid-
priced robotics products). Midea will assist KUKA in leveraging its manufacturing ex-
periences and capabilities to support the development of these products.
(ii) Midea to support KUKA on the supply chain and distribution for its manufactur-
ing initiatives in China
Given Midea’s vast manufacturing footprint in China, it is best positioned to support
KUKA in expanding its footprint quickly. Midea will assist KUKA in seeking opportu-
nities for a joint sourcing strategy so that KUKA will be able to benefit from improved
terms making its product offering even more competitive.
On the distribution side, Midea offers to support KUKA in growing its customer base
even faster by taking advantage of Midea’s existing network. By leveraging Midea’s
experience in automating its own industrial base, KUKA will be in a position to spear-
head the penetration of robotics amongst other prominent Chinese general industrial
players. Midea has excellent relations with many of the large Chinese general industrial
players and will support KUKA in building own relationships.
(iii) Foster the collaboration between KUKA and Midea in Logistics
By fostering the partnership between Swisslog and Annto Logistics, the entire value
chain vis-à-vis customers regarding warehouse logistics solutions and operations can be
covered to enable both companies to capture revenue synergies. Annto Logistics’ vast
logistics network consists of more than 260 logistics centers with 5 million sqm of
warehouse space servicing customers in a wide range of industries such as white goods,
food and beverage (cold-chain), automotive and oil & gas. By leveraging the existing
infrastructure and core competencies, the growth of Swisslog in China can be accelerat-
ed further.
(iv) Leverage Midea’s understanding of customer needs in service robotics
Midea sees substantial opportunities in the broader service robotics market which coin-
cides with KUKA’s strategy to grow in the service robotics segment. Midea’s extensive
experience with consumer products makes it an ideal partner for KUKA to speed up the
development of its service robotics business and improve the position of KUKA in both
industrial and service robotics.
8.2 Independence of KUKA and proposed commitments
Midea fully supports the operational independence of KUKA’s business and regards the
continued leadership of the current management team as critical to KUKA’s continued
success. It is fully supportive of KUKA’s current strategy, employment base and brand
development.
Midea is prepared to agree to specific commitments and has proposed to enter into an
investment agreement (subject to any applicable legal and regulatory requirements).
These commitments include the preservation of KUKA’s sites, employment levels,
brands and intellectual property. Moreover, Midea will look to support KUKA’s addi-
tional investments in Research and Development (R&D) and software to underpin its
competitive advantage.
Midea and KUKA are currently discussing the terms and conditions of such investment
agreement.
9. INTENTIONS OF THE BIDDER AND MIDEA
Midea and the Bidder acknowledge that KUKA is pursuing a successful business strate-
gy and intend to support KUKA in the implementation of such strategy going forward.
The objective of the Transaction is to allow Midea and KUKA to enter into a strategic
cooperation while preserving the independence of KUKA. The management board of
KUKA shall continue to conduct independently the business operations of KUKA in
accordance with applicable law and based on the business strategy currently implement-
ed or developed in the future by the management board.
Accordingly, Midea and the Bidder do not intend to enter into any domination or other
enterprise agreement pursuant to sections 291 et. seq. AktG with KUKA (see further
below Section 9.6 of this Offer Document). Midea and the Bidder welcome a broadly
diversified shareholder base including a substantial free float and the other key major
shareholders and believe that the joint commitment of all shareholders would be benefi-
cial for the KUKA Group as a whole.
9.1 Future business activities, assets and future obligations of KUKA
Business Strategy
Midea and the Bidder acknowledge that KUKA is pursuing a successful business strate-
gy and will support KUKA in the implementation of such strategy. With Midea’s mar-
ket expertise as a leading supplier of household products, Midea and the Bidder intend
to strengthen KUKA’s market position in robotics, automation and logistics in China
and to help KUKA in capitalizing on future market opportunities and in further pene-
trating the Chinese market.
Midea and the Bidder wish to collaborate with KUKA in developing new product lines
such as home/service robotics products. Midea and the Bidder also intend to support
KUKA’s growth strategy along the va}