Research On Midea Group's Acquisition Of German Kuk

The overarching agenda of China’s 14 th Five-Year Plan highlights the need for a comprehensive execution of the supply-side structural reform,elevation of the technological proficiency of Chinese companies,and acceleration of digital advancement across industries.Presently,the manufacturing sector in China confronts the arduous challenge of escalating labor expenditures,necessitating strategies for cutting down costs through active and passive means,backward overcapacity,and fierce industry competition,and in this context,China’s home appliance industry,as an important industry of supply-side structural reform,is urgent to seek breakthroughs and transformation and upgrading.Midea Group,a top player in China’s household appliance manufacturing sector,has been proactively tackling industry challenges.The company has proposed the "dual-intelligence" strategy to adapt to the changing times and transform its business and production processes through intelligent strategic transformation.Additionally,Midea Group has utilized cross-border mergers and acquisitions to expedite the transformation and upgrading process.Kuka is a key enterprise in German industry.Its operating advantages coincide with the development strategy of Midea company,and can provide a strong boost to the globalization strategy of Midea Group.In 2017,Midea Group successfully finalized the incorporation of Germany’s Kuka,which stands as a noteworthy instance of overseas technology-based mergers and acquisitions pursued by Chinese home appliance firms.This study examines Midea Group’s acquisition of Germany Kuka.Initially,the paper organizes and presents relevant literature both domestically and internationally,outlining foreign direct investment theory as the theoretical foundation for the study.Subsequently,the paper provides a comprehensive analysis and overview of the acquisition’s background,progression,and driving forces,and makes an in-depth review and evaluation of pre-M&A preparation strategy,selection of M&A payment and financing means,as well as post-M&A integration strategy,so as to reveal the reasons for the results of M&A.Thirdly,this article employs an event study methodology,financial indicators,and non-financial indicators based on the balanced scorecard approach to examine the immediate and long-term outcomes of Midea Group’s acquisition of Germany Kuka.Lastly,drawing from the previous analysis,this paper concludes with insights and recommendations for Chinese companies pursuing technology-oriented cross-border mergers and acquisitions.