Analysis of M&A in Electrical Manufacturing Enterprises: Evidence from Midea's Acquisition of KUKA

Abstract

Contemporarily, M&A is common in electric manufacturing industry. This paper investigates the specific process of Midea's merger and acquisition of Kuka, and interprets the merger effect from the perspective of environmental analysis, financial index analysis and market analysis based on the annual financial and market development indicators of Midea Group. The case study presented in this paper demonstrates that Midea actively responded to the "Made in China 2025" proposal by seeking technological expansion and advancement. Through acquiring KUKA's industrial robot technology and manufacturing skills, Midea built a smart home industry chain and expanded its business scope appropriately, further realizing its strategic layout for global business. Performance analysis shows that Midea's innovation and technological capabilities significantly improved after the acquisition, leading to enhanced market competitiveness and influence. However, due to the substantial cost of the acquisition, Midea's profitability declined in the short term. The reasons and effects of Midea's merger and acquisition of Kuka are demonstrated, and effective suggestions and implications are put forward accordingly.