Overseas high-tech robotics companies have recently become a major takeover target for Chinese enterprises, as the Chinese government is pushing hard for an industry that can manufacture robots with the same quality as its foreign counterparts do.
One of the latest acquisitions is HTI Cybernetics Inc by Chongqing Nanshang Investment (Group) Co. HTI, founded in 1983, is a US veteran provider of integrated manufacturing solutions and robotic welding systems mainly used by automobile manufacturers like General Motors.
Upon the completion of the deal on October 3, Nanshang obtained a 100 percent stake in HTI for nearly $50 million, according to a press release obtained by the Global Times.
Meanwhile, Nanjing Estun Automation Co is in talks with German automation company M.A.i over 50.01 percent stake purchases worth a total of 8.87 million euros ($10.43 million).
The year 2016 was already a banner year for robotics companies' acquisitions, whereby 50 were sold for over $19 billion, according to calculations made by industry site therobotreport.com. Among them, over 47 percent involved Chinese money, with Midea's high-profile purchase of German robot maker Kuka AG drawing significant attention worldwide.
Helen Koo, CEO of the China operation at Los Angeles-headquartered Crestridge Consulting, predicted that more and more acquisitions will likely take place in the robotics industry in the future.
Successful takeover cases like the Midea-Kuka deal will encourage Chinese companies who want to seek acquisitions in the robotics sector, Koo told the Global Times Tuesday.
Besides, the high-end manufacturing and robotics industry is greatly supported by the Chinese government, making it easier for Chinese investors to pursue assets in those sectors, despite the country's tight control on capital outflow, she noted.
Crestridge Consulting was the exclusive financial advisor for Nanshang's takeover.
Koo recalled that the deal was made smoothly and that Nanshang wired the funds out roughly one month ahead of the closing date.
Gaining competitiveness
Chinese companies expect overseas acquisitions to help them obtain world-advanced robotics technologies.
According to a stock filing posted by Estun on the Shenzhen Stock Exchange in September, the company will speed up the innovation and localization of German technologies after acquiring M.A.i so as to compete with other international robotics players in China's fiercely competitive automation battleground.
China's robot market, the world's largest since 2013, is crucial turf.
"China is by far the biggest robot market in the world regarding annual sales and operational stock," said International Federation of Robotics (IFR) President Joe Gemma in a report released in mid-August.
"It is the fastest-growing market worldwide. There has never been such a dynamic rise in such a short period of time in any other market," Gemma continued.
During the 2018-20 period, robot sales in China are expected to increase between 15 percent and 20 percent on average every year.
Global automation giants seem to have already gained a strong foothold in the market, supplying two-thirds of industrial robots sold in China's booming electronics industry in 2016, according to data from IFR.
This year, more than 30 percent of the world's industrial robots are expected to go to China, and the figures could reach 40 percent by 2019, IFR data showed.
