German angst over Chinese M&A

Kuka’s robotic arms are a familiar sight on assembly lines, like this Mercedes-Benz plant in Germany, but the majority Chinese-owned company wants to expand beyond the factory

 

Germany is a top target in China’s search for innovative engineering groups — but some see a threat

At this year’s Hannover Messe, the world’s biggest industrial fair, it was one of the stars of the show: an elegant, ultra-sensitive robot known as an Iiwa that can pour a beer and brew a cup of coffee.

Angela Merkel and Barack Obama, guests of honour on the Messe’s opening day, were intrigued. “Can it squeeze lemons?” the German chancellor asked.

The Iiwa — or intelligent industrial work assistant — is produced by Kuka, one of Germany’s most innovative engineering companies. But it will not be entirely German for long. Less than a month after the fair, a Chinese appliance-maker called Midea offered to buy Kuka for €4.5bn, in the largest ever Chinese takeover of a German company.

China’s robot army set to surge

China’s uptake of industrial robots is set to rise rapidly in the coming years as higher labour costs and the heightened aspirations of workers push manufacturers to embrace automation.

The development may add to fears that workers in poorer countries are most in danger of being displaced by automation, with analysis by Citi and the Oxford Martin School, a research and policy unit of the UK university, published earlier this year suggesting that more than 75 per cent of jobs in China are at a “high risk” of computerisation.