KUKA : Combination in the automation and logistics industry: (Thu, 25 Sep 2014 00:00:00 GMT)

• By joining forces, KUKA AG and Swisslog Holding AG aim to become a global automation powerhouse for integrated automation and logistics solutions
• Through the new alliance, KUKA will tap the attractive logistics market and boost sales revenues in the General Industry business from currently
  30 percent to approximately 50 percent
• Swisslog gains global access to KUKA's product, technology and sales platforms
• Premium of 8.9 percent on the closing price as of 24 September and of
  15.4 percent on the average volume-weighted average share price over the last 60 days
• Press conference with live audio webcast to be held in Zurich at 10 am tomorrow

Augsburg, September 25, 2014. KUKA AG will submit a public offer to the shareholders of Swisslog Holding AG, Switzerland. The Supervisory Board of KUKA today approved a resolution on the matter by the Executive Board. The Board of Directors of Swisslog Holding AG adopted a corresponding resolution in parallel. Following the signing of the transaction agreement, KUKA AG published a preliminary announcement of the public offer. Its aim is to acquire at least two thirds of Swisslog's outstanding shares. Swisslog shareholders will receive an offer of CHF 1.35 per share in cash. This equates to a purchase price of CHF 338 million and an enterprise value of CHF 353 million, including net cash and pension liabilities. The offer represents a premium of 8.9 percent on the September 24, 2014 closing price and of 15.4 percent on the volume-weighted average price of Swisslog shares over the last 60 trading days. KUKA will largely use existing cash resources to finance the transaction. These resources will partly come from an increase in KUKA's equity base. This increase has already been announced in the event that the offer is successfully concluded. It is expected to generate some
EUR 80 million.

Complementary markets

The planned combination of the two technology companies follows a clear industrial logic: The aim is to create a new, global supplier of integrated automation solutions for numerous industries. With consolidated pro forma sales revenues of EUR 2.3 billion, based on their respective sales for 2013, the two companies together would be a strong supplier in a number of different automation markets around the world.
The two companies complement each other extremely well: KUKA is one of the world's leading suppliers of robots and automated production systems, primarily serving customers in the automotive industry but also increasingly in fast-growing sectors, such as the aviation and machine tool industries. Swisslog, whose brand and registered office will not be affected by the transaction, delivers best-in-class automation solutions for forward-looking hospitals, warehouses and distribution centers. Its focus is on the retail industry, including e-commerce, pharma as well as temperature-controlled food.

Advantages for both partners

Dr Till Reuter, CEO of KUKA AG, says: "For us, the automation of logistics processes means a thrust into existing and new industries. The warehouse logistics segment and the healthcare industry are attaining high growth rates, driven by the global e-commerce boom and demographic change. At the same time, our customers in the automotive industry have a strong interest in logistics solutions. By acquiring a stake in Swisslog, we intend to not only secure our leading position in the automotive business, but also to expand the proportion of our general industry business from approximately 30 percent now to approximately 50 percent in line with our strategic objectives. With robots and systems from KUKA, Swisslog will be able to offer its customers attractive additional products. Our robots offer extended functionality, such as mobility functions, which open up entirely new potential applications."

Growth potential and synergies

Swisslog's integration into the KUKA Group will open up new growth potential for both companies by optimising their market position. The two partners expect that their collaboration will generate synergies worth medium-term savings in the low double-digit million range. These savings will primarily arise from the joint use of technology, the pooling of know-how, in procurement and services, and from the joint use of international location structures.

Offer to Swisslog shareholders