midea breaks into fortune 500 -...

Advances Fusion, July-August, 2016

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Midea Breaks into Fortune 500

Midea Group entered the Fortune Global 500 for the first time, ranking #481

Vol. 6, #6, July-August 2016, No. 60


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ADVANCES

Contents

Midea Advances Newsletter is published monthly

by Midea International Business. We welcome all

comments, suggestions and contributions of

articles, as well as requests for subscription to our

newsletter. You can reach us by phone at (0086)

15014690097

Or by email at: [email protected]

Address:

ADVANCES, Midea International Business

Midea HQ

No. 6 Midea Road

Beijiao, Shunde, Foshan, Guangdong

P.R.C. 528311

Web: www.midea.com/global

Quote of the

Month:

“In business,

what’s dangerous

is not to evolve.” -

Jeff Bezos

NEWSLINE

Midea Enters Global Fortune

500 Page 3

KUKA

www.midea.com

From Stravinsky to

Solzhenitsyn PAGE 19-22

First Brand Store in Moscow PAGE 4

Toshiba, Midea Complete

Transfer of Toshiba

Appliances Business PAGE 9

Brand Merges with Springer

in Brazil PAGE 11-12

German Certification PAGE 5

2 Products Named Best of the

Best in Germany PAGE 10

Land of Caves and Ancient

Trade Routes PAGE 15-18 Profit up 14% Year-on-Year PAGE 10

IoT Relationship with

Californian Network PAGE 6

FUSION

Feature in Brazil’s Largest

Finance Paper Page 12

Chiller Installed in Tajikistan

Ministry of Foreign Affairs PAGE 5

Cooperation with Jordanian

Princess PAGE 7

Midea Climbs the Forbes 500 PAGE 8

Workers Volunteer in Flood-

Hit Areas PAGE 8

Midea Announces Results of

Kuka Takeover PAGE 13-14


3

Midea Enters Fortune Global 500

By Midea

M idea became the first compa-

ny from the Chinese household appliances

industry to enter the Fortune Global 500

list, when the updated ranking of the

world's largest corporations was an-

nounced on July 20, 2016.

Midea debuted at 481st after a strong 2015

that saw the company achieve US$22.17

billion revenue, and total profit of US$2.02

billion, representing a 21 percent year-on-

year increase.

"In 2015 the global home appliances

industry faced more challenges, and Midea

was able to fly upwind by adhering to the

strategy of developing cutting-edge prod-

ucts, improving efficiency and emphasizing global opera-

tions." said Andy Gu, Vice President at Midea Group.

Midea has invested US$3 billion in research and devel-

opment over the past five years and now operates R&D insti-

tutes in China, the United States, Japan, Germany, Italy and

Singapore, integrating global resources to drive technological

breakthroughs. This is in addition to an US$1.04 billion in-

vestment in improving automation which has resulted in an

average current automation ratio of 17 percent.

So far in 2016, Midea has acquired Toshiba's home ap-

pliance business, and is in the process of acquiring German

industrial robotics group Kuka AG and Italian air-conditioning

manufacturer Clivet. Midea's global strategy is to switch from

traditional product exportation from China to operating locally

in key markets.

Midea's global platform now operates more than 200 sub-

sidiaries and 9 strategic business units, and the company runs

seven full-scale operations covering R&D, manufacturing and

sales in 6 countries including Vietnam, India, Belarus, Egypt,

Brazil and Argentina. Midea products are sold in more than 200

countries and regions worldwide.

The company also landed several high-profile projects in

2015, including winning the bid to

install central air-conditioning in

the stadiums for sports games in

Brazil.

"Midea is dedicated to helping

people rediscover what home

means, in a surprisingly friendly

way," said Brando Brandstaeter,

Head of Brand & Communication

of Midea International Business.

"In the future, Midea will become

a conglomerate focused on smart

home appliances and intelligent

manufacturing."

NEWSLINE


4

First Brand Store in Moscow

By Ekaterina Korablyova

M idea held the grand opening of its first brand

store in Moscow, Russia on July 21, a major move to further

expand the company's brand and products in the Russian

market.

The Moscow brand store, located in Techno Mall Gor-

bushkin Dvor, Bagrationovski Proezd, 7 is Midea's second

store in Russia. With an area of 90 square meters, the store is

open daily from 10:00-21:00 and brings comprehensive mod-

ern home appliance products including microwave ovens,

hoods, hobs & ovens, dishwashers, and vacuum cleaners to

Russian consumers at reasonable prices. Qualified counselors

will help customers choose the appliances that meet all de-

mands and arrange delivery and installation after purchase.

Midea's long-term strategy in Russia is to develop a large

retail network that not only collaborates with major federal

and regional retail chains such as M.Video and Poisk, but also

operates exclusive brand stores to improve its recognition

among Russian consumers.

With sales of 25,000 units in 2012, Midea has been ex-

panding in Russia and has become the third largest in the

country. According to Alexey Obukhov, general director of

Midea Russia, the company has already sold 675,000 units in

2016, and this amount is expected to reach two million

by 2020.

To ensure that its innovative products are reliable and

time-tested, Midea adopts strict quality control

measures and has also established an after-sales service

network of 266 authorized service centers across Rus-

sia.

"It is our goal to bring comfort and warmth to the

home by introducing our home and kitchen appliances

to our

customers

in Russia,"

said Ekate-

rina Kora-

bleva,

Midea

brand

manager in

Russia. "Midea is

helping people re-

discover the mod-

ern concept of

'home' and contrib-

uting to people

being able to enjoy

every moment

spent at home."

NEWSLINE


5

Chiller Installed in Tajikistan Ministry of

Foreign Affairs By CAC

M idea Commercial Air Conditioning (CAC) has in-

stalled a water-cooled screw chiller in Tajikistan’s Ministry of

Foreign Affairs Building. Located in Dushanbe, the building has

completed the installation, boasting a ca-

pacity of 1,480 kW.

Midea water-cooled screw chiller

operates with a flooded-type evaporator

and a high-efficiency compressor. Opti-

mized system design

and enhanced heat

exchange efficiency

ensure the units work

seam-

lessly

under

both

full

load and part load.

Last year CAC’s water-cooled screw chiller was

also installed in the office building of Tajiki-

stan’s Prime Minister. Other locations at

which the product has been installed by Midea

CAC include the All Season Nusa Dua Resort

Hotel in Indonesia; Mumbai Little World

Shopping Mall; and Terminal 3 at Beijing Air-

port.

NEWSLINE

By Ma Songwu

German Certification

T he Association of German Electricians (VDE) certi-

fied Midea’s Kitchen Appliances Division after completing the

Test Data

Acceptance

Program

from July 18-

28. At the

same time,

VDE experts

Rainer Brenk

and Thorsten

Rosenbaum

carried out a

training

course on

performance

measure-

ment.

Head-

quartered in

Frankfurt,

the VDE is

one of the

largest technical and scientific associations in Europe with more

than 36,000 members. This training and certification will greatly

aid the Kitchen Appliances Division’s future endeavors in Eu-

rope.


6

IoT Relationship with Californian

Network By Kevin McGeary

M idea Group has

selected the Ayla Networks

Internet of Things (IoT) plat-

form as its preferred overseas

IoT cloud partner for all its

connected HVAC products.

Midea joins other top HVAC

manufacturers in using Ayla

services.

―The Ayla IoT platform now

powers four of the top 10

HVAC manufacturers in Chi-

na, which is powerful testimony to Ayla’s IoT leadership and

market position,‖ said David Friedman, CEO and co-founder

of Ayla Networks. ―Midea is an enormously successful and

future-thinking enterprise, and we look forward to helping

them become a dominant player in the global smart home

market.‖

―Midea Group laid out its concept for the smart home a

long time ago and has established Midea Smart Home Tech-

nology Co., Ltd., to focus on the development of that busi-

ness,‖ said Li Qiang, general manager of Midea Smart Tech-

nology. ―This cooperation with Ayla is a major step in the

international expansion of Midea Group’s smart home busi-

ness. As Midea’s third-party cloud platform partner for over-

seas markets, Ayla will join with Midea to create a globalized

structure of intelligent services for smart homes.‖

Midea Group’s

relationship with

Ayla Networks is

through its Midea

Smart Technolo-

gy business unit.

Established in

2014 under the

name of Midea

Smart Living

Lab, Midea Smart

Technology is

working to inte-

grate all Midea technologies and products lines to become a

total solution provider for the smart home industry.

Midea Smart Technology’s M-Smart System supports di-

versified smart product inside the nearly 50-year-old Midea

Group. In addition, Midea Smart Technology is building an M-

Smart ecosystem that will provide smart products and solutions

to a wide range of business-to-business (B2B) and business-to-

consumer (B2C) enterprises. Already, Midea Smart Technolo-

gy’s ecosystem includes Ali Cloud, Amazon, Huawei, IBM,

LeTV, TCL, Tencent and Xiaomi.

About Ayla

Ayla Networks empowers leading manufacturers by sim-

plifying the inherent complexity of the Internet of Things (IoT),

enabling them to turn their products into smart connected sys-

tems and transform their businesses to compete in the game-

changing world of connectivity. Delivered as a cloud platform-

as-a-service (PaaS), Ayla’s Agile IoT platform provides the flexi-

bility and modularity to enable rapid changes to practically any

type of device, cloud or app environment. Ayla Networks was

named a 2015 Cool Vendor in the Internet of Things by Gart-

ner, Inc. Ayla’s investors include 3NOD, Acorn Pacific, Ants

Capital, Cisco, Crosslink Capital, the International Finance Cor-

poration, Linear Venture, Mitsui, SAIF Partners, SJF Ventures

and Voyager Capital.

For more information, visit www.aylanetworks.com

NEWSLINE


7

Cooperation with Jordanian Princess

By Justin Li

M idea welcomed four representatives of the Prin-

cess of Jordan on July 25. The four students are here on a

solar power project funded by the Princess Alia Foundation

(PAF) after coming in the top three in a design competition

for buildings that use green energy sources.

Their trip to China took in both Huawei and Midea,

after Midea donated 10 solar-powered air conditioners to their

school. During their

five-day visit, Midea

gave them a varied and

memorable trip, help-

ing them understand

more about the

Group’s products and

manufacturing process.

As soon as they arrived

at the Group headquarters, they were immediately struck by

the building's unique design and the greenery and fishponds

that surround it. They were then shown around the product

showroom and history museum.

Midea’s technical support team then gave an introduc-

tion to the technology that the Group uses. This gave the

students a lesson in how much work and skill are required to

make air conditioners easy to use.

They were also shown around Midea’s factories in Shun-

de and Chancheng, near the global headquarters. The students

were then talked through some of Midea’s recent mergers and

acquisitions, including the ones related to automated technol-

ogy, which will form the future of manufacturing. In fluent

English, some of Midea’s intake of new graduates talked them

through Midea’s vision for the future.

Digital AC Company (DAC) in Jordan represent Midea

A/C products,

DAC is owned

by Al-Asalah

for Electrome-

chanics, which

has more than

20 years of ex-

perience both

supplying and servicing

in HVAC field in the

region market, where

more than 700 VRF

projects installed with

total capacity above

16000 RT. Working

closely with the PAF

can help Midea further

its reputation in the Mid-

dle Eastern country.

On May 23 Princess Alia visited Midea’s training college in

Jordan. Midea’s Regional Director Jia Wei showed her around

as representatives of the country’s major media organizations

looked on. As a sign of its commitment to contributing posi-

tively to Jordanian society, Midea donated 20 Mission Split In-

verters to a school that is funded by the PAF. This donation is a

sign of things to come.

Due to the quality and reliability of its products, Midea

overcame competition

from Japan, Korea,

Europe and North

America to land the

air conditioning pro-

ject for the Aqaba

Saraya project. The

project is a premier

hospitality and leisure

destination built around a 1.5 kilometer lagoon. Saraya Aqaba

includes a variety of luxurious residential units, World-class

hotels, signature retail shops, international restaurants, a Water

Park, a beach club and an amphitheater, along with other leisure

and business venues within an authentically styled ancient Ara-

bian city.

The PAF was founded by H.R.H. Princess Alia Al Hus-

sein and is a registered non-profit, non-governmental organiza-

tion, under the Ministry of Social Development in the Hashe-

mite Kingdom of Jordan. Its aim is to promote compassion

and respect for all, using a holistic approach and bringing all

stakeholders together to work as a united front.

NEWSLINE

Jia Wei shows the princess around


8

Midea Climbs the Forbes 500

By Kevin McGeary

L ast year Midea Group entered the top 500 in The

Forbes Global 2000 for the first time. The criteria for the list

include sales, assets, profit and market value, and this year saw

Midea rise from 436th to 402nd.

In sales, the Group is 389th (up from 408th) and in profit

it is 307th (up from 418th). It is again the highest ranked home

appliances business on the list.

Last

year was a

challenging

one for the

industry,

with key

markets

encounter-

ing politi-

cal and

economic

instability.

In spite of

this, Midea Group’s profit saw a 21 percent increase year-on-

year.

The Forbes Global 2000 is a useful indicator of which are

the leading public companies in the world. It has been pub-

lished every year since 2003.

NEWSLINE

By MIB

Workers Volunteer in Flood-Hit Areas

M idea’s Residential Air Conditioning (RAC) factory

in

Wuhu

City

in

South

Chi-

na’s

Anhui

Prov-

ince

sent

teams

of volun-

teers with

truckloads

full of

packages

to nearby

flood-hit

areas in

the first

week of

July. As

millions

were evacuated from their homes, the volunteers have helped

the army deliver supplies to victims.


9

Toshiba, Midea Complete Transfer of

Toshiba Appliances Business

M idea Group Co., Ltd. (SZSE: 000333, ―Midea‖)

announced June 30 that they had completed the previously an-

nounced transaction to acquire Toshiba’s Home Appliances

Business.

―Today marks another important milestone in the strate-

gic partnership between Toshiba and Midea, which will bring

benefits to our customers, employees, suppliers and partners,‖

said Mr. Paul Fang, Chairman and President of Midea, ―We look

forward to leveraging on our complementary resources and ca-

pabilities to fully realize the potential of the partnership. We

believe our continu-

ous investment in the

brand, technology,

marketing and people

and unwavering com-

mitment to product

quality will enable us

to serve our custom-

ers better and create

more value for the

society. To our home

appliance customers,

Toshiba brand will

continue to be synon-

ymous with excel-

lence, reliability and

innovation.‖

As previously announced on March 30, 2016, Toshiba and

Midea had entered into a Definitive Agreement (―DA‖) to trans-

fer 80.1% stake in Toshiba Lifestyle Products & Services Corpo-

ration (―TLSC‖). As of June 30, 2016, all the condition prece-

dents of the DA has been satisfied and the relevant regulatory

approvals have been obtained. The transaction price for the

80.1% stake was determined at JPY51.4 billion (c.US$500 mil-

lion).

About Midea

Midea is a global leading consumer appliances and heating,

ventilation and air-conditioning (HVAC) systems business, with

diversified product offering, encompassing air-conditioners,

refrigerators, laundry appliances, kitchen appliances and various

small home appliances. Midea is committed to build a better

life and become the world’s Midea by adhering to the principle

of ―Creating Value for Customers‖. Midea is focused on con-

tinuous technological innovation to improve product and ser-

vice quality, to make life more comfortable and pleasant.

Founded in 1968 in Guangdong, China, Midea has now

established a global platform of more than 200 subsidiaries and

9 strategic business units. Midea had total revenues of over

US$21 billion in the fiscal year ended December 31, 2015 and

approximately 100,000

employees worldwide.

To find out more about

Midea, please visit

http://

www.midea.com/

global

About Toshiba

Toshiba Corporation, a

Fortune Global 500

company, channels

world-class capabilities

in advanced electronic

and electrical product

and systems into three focus business fields: Energy that sus-

tains everyday life, that is cleaner and safer; Infrastructure that

sustains quality of life; and Storage that sustains the advanced

information society. Guided by the principles of The Basic

Commitment of the Toshiba Group, ―Committed to People,

Committed to the Future‖, Toshiba promotes global operations

and is contributing to the realization of a world where genera-

tions to come can live better lives.

Founded in Tokyo in 1875, today’s Toshiba is at the heart

of a global network of over 580 consolidated companies em-

ploying 199,000 people worldwide, with annual sales surpassing

6.6 trillion yen (US$55 billion). (As of March 31, 2015.)

To find out more about Toshiba, visit www.toshiba.co.jp/

index.htm

NEWSLINE

Press Release


10

2 Products Named Best of the Best in

Germany By MIB

E veryone who was anyone in international design was

in Essen, Germany on July 4 for the Red Dot Awards. In spring,

a 41-strong jury awarded the coveted Red Dot label for good

design to the most outstanding products of the year. Now it was

time to pay tribute to the winning creations and the people who

made them.

At the red carpet gala, a Midea-brand air conditioner and a

washing machine from subsidiary Little Swan were presented

with Best of the Best awards. Other

companies to win the award included

Ikea, Airbus, Ferrari, Sony, and Mi-

crosoft.

Little Swan Beverly 7188 Series

Washing Machines

Manufactured in South China’s Jiang-

su Province, Little Swan’s Beverly

7188 has a smart sensor that can cal-

culate from the weight of the clothes how much detergent is

needed. With its transparent top loading lid, it is particularly

friendly to the elderly consumer.

Hybrid Air Conditioner

The Hybrid Air Conditioner, designed in collaboration

with Phoenix Design GmbH & Co. KG, has a built-in air puri-

fying feature,

particularly use-

ful in polluted

modern cities.

Along with its

stylish design, it

boasts a self-

cleaning func-

tion. With ultraviolet light and integrated brush, the filter can

automatically clean and disinfect. When the device is in self-

cleaning mode, the signal light will illuminate through the perfo-

rated plastic panel.

NEWSLINE

By Midea

Profit up 14% Year-on-Year

I n the first half of

2016, Midea Group

achieved revenue of

US$11.7 billion, according

to the Group’s H1 report.

Net income for the six

months ending June was

US$1.5 billion, a year-on-

year increase of 14 per-

cent.

During this period,

Midea successfully com-

peted to outfit millions of

Chinese homes with smart appliances

and introduce more automated tech-

nology in factories. It has also made

major acquisitions in Germany, Italy

and Japan that will help it expand.

Consolidated gross margin in the first

half was 29.2%, up 1.8 percentage

points. Net profit margin was 13.2%,

up 2.4 percentage points.

The first six months were a doubly

fruitful period for the Group’s ―twin

smart‖ approach of becoming a lead-

er in Internet of Things ―smart

home‖ technology and automated

manufacturing.


11

Brand Merges with Springer in Brazil

By Nadia Mathias

A meeting was held August 23 to announce a mer-

ger of the Midea and Springer brands in São Paulo , Brazil.

Executives, clients and media were present as Midea displayed

a range of new products it will promote in the South Ameri-

can country, including electric pans, fryers and vacuum clean-

ers.

With its increased white goods portfolio, executives

expect Midea to be among the biggest players in Brazil’s home

appliances industry over the next five years. According to

feedback from the 239 people present, the event – sponsored

by Midea Residential Air Conditioning (RAC) - was a big suc-

cess.

Subsidiary brand Springer Midea will combine the Bra-

zilian traditions of Springer while adopting the Chinese leader-

ship and innovation of Midea. It will introduce new air condi-

tioning products and evaporative coolers to the market.

It is part of the expansion plan adopted by the company

and also includes a 51 percent increase of products in the white

line portfolio. The new launches were presented to clients at the

event.

―We realized that for the domestic market, it would be

more interesting to have a competitive advantage focused on

consumer needs. So, we decided to combine the tradition of the

brand Springer to Midea’s leadership and innovation in the de-

NEWSLINE


12

Brand Merges with Springer in Brazil (Cont.)

By Nadia Mathias

velopment of residential air-conditioning products‖, explained

Felipe Costa, Midea Carrier’s CEO in Brazil.

NEWSLINE

By Nadia Mathias

Feature in Brazil’s Largest Finance Paper

B razil’s largest news-

paper for economics, finance

and business, Valor Econômico,

published an article about

Midea’s growth strategy in the

country. Midea’s future direc-

tion and the brand merger of

Springer and Midea in air condi-

tioning were among the themes

discussed by the newspaper in

the article that featured Felipe

Costa, the CEO of Midea-

Carrier in Brazil, as an interview-

ee.

According to the article,

the company plans to tri-

ple in size in Brazil in the

next five years, reaching

R$ 4 billion (US$1.2 bil-

lion) in net revenue by

2020. This would place it

in the top three in the in-

dustry. Strategies include a

50 percent expansion in

the product line, adding

electric pans, fryers and

vacuum cleaners to the

range. Felipe Costa


13

Midea Announces Results of Kuka Takeover

Following the close of the acceptance period, 72.18%

percent of KUKA shares were tendered

Minimum acceptance threshold of 30% and other non-

regulatory conditions were satisfied

Additional two-week acceptance period will begin on

July 21, 2016 and will expire on August 3, 2016

Guangdong, China, 20 July 2016 – Midea (Midea Group

Co Ltd, SZSE 000333), one of the world’s leading industrial

groups in consumer appliances and Heating, Ventilation and Air

-Conditioning (HVAC) systems, announced today, following the

close of the acceptance period, the results of the acceptances of

the voluntary public takeover offer made by its subsidiary MEC-

CA International (BVI) Limited for all shares of KUKA AG

(KUKA), a leading global supplier of intelligent automation so-

lutions. 72.18% of KUKA shares were tendered as of July 15,

2016.

Paul Fang, Chairman and CEO of Midea, commented:

―Today we have reached an important milestone in expanding

our partnership with KUKA to deliver greater value for both

companies. The investment agreement between KUKA and

Midea governs the partnership between both companies. We

want to help grow KUKA’s business and increase its footprint,

especially in China.‖

The total number of KUKA shares for which the takeover

offer has been accepted during the offer period plus the 13.51%

KUKA shares indirectly held by Midea prior to the takeover

offer, result in 85.69% of the issued share capital and the exist-

ing voting rights of KUKA. The minimum acceptance threshold

of 30% has therefore been satisfied. The other non-regulatory

conditions of the takeover offer are satisfied as of the end of the

acceptance period. The offer remains subject to regulatory ap-

provals.

According to the German Securities Acquisition and Take-

over Act (WpÜG), shareholders of KUKA AG who have not

tendered their shares can still accept the offer by tendering their

shares during the additional two-week acceptance period, which

will begin on July 21, 2016 and end on August 3, 2016 at 24:00

hours (local time Frankfurt am Main). Midea will disclose the

final figure of shares tendered following the expiration of the

additional acceptance period.

Complete terms and conditions of the takeover offer can

be found in the German offer document published on the web-

site www.partnershipinrobotics.com. An English convenience

translation of the German offer document is also available on

the website.

IMPORTANT INFORMATION FOR INVESTORS

AND SHAREHOLDERS

Additional information

Midea has the financial capacity needed to implement the

transaction. The transaction is financed via a credit facility.

Morgan Stanley is acting as exclusive financial advisor and

Freshfields Bruckhaus Deringer is acting as legal advisor to

Midea on the transaction.

This announcement does not constitute an offer or an

invitation to purchase any securities. The takeover offer is

made solely by means of the offer document, which contains

the full terms and conditions of the takeover offer including

details of how it may be accepted.

This document may contain certain forward-looking state-

ments. Such statements are, in particular, indicated by terms

such as "expects", "believes", "is of the opinion", "attempts",

"estimates", "intends", "assumes" and "endeavors" and similar

phrases. Such statements express current intentions, views, ex-

pectations, estimates and forecasts with regard to possible fu-

ture events. They are, inter alia, based on certain assumptions,

assessments and forecasts, are subject to risks and uncertainties

and therefore they may turn out to be incorrect.

Notice to US holders of KUKA AG Shares

The takeover offer is being made for the securities of a

German company and is subject to German disclosure require-

ments, which are different from those of the United States. The

financial information included in this announcement has been

largely prepared in accordance with International Financial Re-

porting Standards and the generally accepted accounting princi-

ples of the PRC and thus may not be comparable to financial

information of US companies or companies whose financial

KUKA

Press Release


14

Midea Announces Results of Kuka Takeover

statements are prepared in accordance with generally accepted

accounting principles in the United States. The takeover offer is

made in the United States pursuant to the applicable US tender

offer rules, including Regulation 14E and relevant provisions on

exemptions from the prohibition on purchases outside the take-

over offer and otherwise in accordance with the requirements of

the German Securities Acquisition and Takeover Act

(Wertpapiererwerbs- und Übernahmegesetz). Accordingly, the

takeover offer will be subject to disclosure and other procedural

requirements, including with respect to withdrawal rights, offer

timetable, settlement procedures and timing of payments that

are different from those applicable under domestic US tender

offer proce-

dures and

law.

To the

extent per-

missible un-

der applica-

ble law or

regulation,

MECCA

International

(BVI) Lim-

ited (the

Bidder) and

its affiliates

or brokers

(acting as agents for the Bidder or its affiliates, as applicable)

may from time to time before, during or after the period in

which the takeover offer remains open for acceptance, and other

than pursuant to the takeover offer, directly or indirectly pur-

chase, or arrange to purchase, shares of KUKA AG, that may be

the subject of the takeover offer, or any securities that are con-

vertible into, exchangeable for or exercisable for shares of KU-

KA AG. Any such purchases, or arrangements to purchase, will

comply with all applicable German rules and regulations and

Rule 14e-5 under the U.S. Securities Exchange Act to the extent

applicable. Information about such purchases will be disclosed

in Germany to the extent required by applicable law. To the

extent information about such purchases or arrangements to

purchase is made public in Germany, such information also will

be deemed to be publicly disclosed in the United States. In addi-

tion, the financial advisors to the Bidder may also engage in

ordinary course trading activities in securities of KUKA AG,

which may include purchases or arrangements to purchase such

securities.

About Midea

Midea is a leading global player in consumer appliances

and Heating, Ventilation and Air-Conditioning (HVAC) sys-

tems, with diversified product offering, encompassing air-

conditioners, refrigerators,

laundry appliances, kitchen

appliances and various small

home appliances. Midea is

committed to build a better

life by adhering to the princi-

ple of ―Creating Value for

Customers‖. Midea is focused

on continuous technological

innovation, including robot-

ics, to improve product and

service quality, to make life

more comfortable and pleas-

ant.

Founded in 1968 in Guang-

dong, China, Midea has now

established a global platform of more than 200 subsidiaries and

nine strategic business units. Midea had total revenues of over

EUR 18.7 billion in the fiscal year ending December 31, 2015

and approximately 100,000 employees worldwide. Midea runs

21 manufacturing sites globally and operates 260 logistics cen-

tres. Midea is a private company listed on the Shenzhen Stock

Exchange (000333). Midea has a diversified investor base with

approximately 20 percent of shares held by international institu-

tional investors.

To learn more about Midea, please visit http://

www.midea.com/global/

For the tender offer document please visit http://

www.partnershipinrobotics.com/

KUKA

Press Release


15

Land of Caves and Ancient Trade Routes

By Kevin McGeary

FUSION

The native tribes of East Malaysia have their own lan-

guages which are related to, but easily distinguishable from,

Malay. English was the predominant language in government

until 1969, and is still a pillar of the education system.

Ancient history

The Lembah Bujang Archaeological Museum is the only

museum in Malaysia which exhibits archaeological collections

that serves as evidence of the existence of a trade and Hindu/

Buddhism propagation center in Southeast Asia from the third

to the twelfth centuries AD. It has archaeological evidence that

clearly

shows that

Malaysia’s

Bujang Val-

ley was a

central port

which served

as a trade

center be-

tween Chi-

nese, Indian

and Arab trad-

ers.

Lembah Bujang was also the first port in southeast Asia

via its sea route which functioned as an alternative route to the

Far East to rival the silk road. Lembah Bujang’s significance as

Southeast Asia’s central port was evident in archaeological

finds and writings of Chinese and Arab seamen as well as in

Indian literature. These chronicles, dated between the 2nd and

14th century AD, told of the existence of a prosperous and

bustling kingdom in Lembah Bujang that was known as the

"seat of all felicities".

Founding

It was born as a

modern nation

state in 1957

when the Brit-

S ince a local subsidiary was established in 2006, Malay-

sia has become one of Midea’s most important markets. Midea

Scott & English has provided Malaysian consumers with mod-

ern, high quality products. Supported by sales & service centers

throughout the country, the company’s philosophy is to ensure

customer satisfaction with quality products that are accessible

to all Malaysian consumers.

Malaysia is the third largest economy in Southeast Asia in

gross domestic product behind Indonesia and Thailand, and

the third largest in per capita gross domestic product behind

Singapore and Brunei. Here are some things you may not have

known about the country.

Language

Malaysia contains speakers of 137 living languages, 41 of

which are found in Peninsula Malaysia. The government pro-

vides schooling at the primary level in each of the three major

languages, Malay, Mandarin and Tamil.

The national, or official, language is Malay which is the

mother tongue of

the majority Ma-

lay ethnic group.

Malay became

predominant after

the 1969 race

riots. A variant of

the Malay lan-

guage that is spo-

ken in Brunei is

also commonly

spoken in East

Malaysia.

Lembah Bujang


16


(Cont.) By Kevin McGeary

FUSION

Cuisine

Malaysia's

culinary

style in the

present

day is pri-

marily a

melange

of tradi-

tions from

its Malay,

Chinese, Indian, Indonesian and ethnic Bornean citizens, with

heavy to light influences from Thai, Portuguese, Dutch, and

British cuisines.

The national dish is widely said to be nasi lemak, rice

steamed with coconut milk and pandan leaves. It is customari-

ly served with ikan bilis, peanuts, sliced cucumber, hard boiled

eggs and sambal. Other popular dishes include congee, a type

of rice porridge, eaten primarily as a breakfast or late supper. It

is also considered suitable for the sick as a mild, easily digesti-

ble food.

A practice known as "open house‖ is popular on festive

occasions. Home-cooked or catered food is provided by the

host at their own expense, and while it is acceptable for guests

to bring along gifts, they are ex-

pected to help themselves to the

food. Open house events may also

be held at restaurants and larger pub-

lic venues, especially when hosted by

government agencies or corpora-

tions.

Fashion and Attire

Baju is the term for clothing in

the Malay language. Since Malaysia

comprises three major cultures, each

culture has its own traditional and

religious articles of clothing all of

ish surrendered their sovereignty over Malaysia and the penin-

sula became independent with the name 'Federation of Malay-

sia'. The new federation was established on September 16th,

1963 by the unity of Malaysia, Singapore and the east-Malaysian

states Sabah and Sarawak on the north coast of Borneo.

Directly after this, The Philippines and Indonesia broke

diplomatic relations, because they believed that some parts be-

longed to them. Indonesia started with the konfrontasi

(confrontation); fishing-boats in front of Sarawak's coast were

sunk and their planes entered Sabah airspace. But after the de-

posal of Indonesian President Sukarno in 1966, the government

made a treaty of peace with Malaysia and The Philippines

dropped its territorial claim on Sabah.

In 1965 Singapore separated from the federation and

became an independent state. The sultan of the oil state Brunei

(located between Sabah and Sarawak), made clear that he op-

posed unity with Malaysia.

Caves

Among

the most

famous

caves in

the world

are those

in Gunung

Mulu Na-

tional Park,

Sarawak, which was inscribed as a World Heritage site in 2001.

More than 362 km of cave passage have been mapped there.

Some of its caves are world record holders, such as Gua Nasib

Bagus, which houses Sarawak Chamber, the world’s largest.

Clearwater Cave is the eighth longest in the world, at 215 km.

Deer Cave is one of the world's largest cave passages. Niah

Caves, also in Sarawak, is a famous archaeological site. A

40,000 year old human skull was found there and rock paint-

ings have been dated at 1200 years old.

Perak Tong Cave Temple is located just north of Ipoh

and is one of the oldest temples and famous for the murals.

The walls of the cavern are decorated with colorful murals de-

picting characters and events from Chinese mythology and

Buddhist scriptures.

Nasi lemak

Baju Kurung Kedah

Gunung Mulu


17



FUSION

KRU is the most successful hip hop dance group in Malaysia.

After bringing Rap music to the masses in 1992, they estab-

lished their own record label which spawned the first Malaysi-

an girl group Feminin and R&B crooners Indigo. Feminin

debuted at RTM Eid ul-Fitr special in 1993 marking the start

of Malaysia’s girl group era.

Contemporary pop music exchanges between Malaysia,

Indonesia, Singapore and Brunei are normal since the Malay

language is widely spoken in all of those countries. Pop singer

Siti Nurhaliza for

example is famous

in all four.

Yuna, an inde-

pendent Malaysian

singer-songwriter,

had her 2012 single

―Live Your Life‖

produced by Phar-

rell Williams. She

was subsequently

recognized with a

National Youth

Icon Award by

Prime Minister Da-

tuk Seri Najib Razak.

Sport

The national

sport of Ma-

laysia is Sepak

Takraw. It is a

sport in which

the players

must kick a

takraw (hollow

ball made out

of rattan or

woven palm

stems) over a

net. It is similar

which are gender-specific and may be adapted to local influ-

ences and conditions.

Baju Kurung Kedah – worn only by Malay women as a

daily dress for married women. It is a shorter dress with three-

quarter sleeves, so the wearer can move around.

Baju Batik – worn by men and women on formal occa-

sions. It usually consists of colorful cotton printed in the

―batik‖, that is cloth made from wax-resist dyeing.

Baju Kurung – worn by women for formal occasions

like school or weddings. It

is brightly colored and can

come in a variety of print-

ed designs. It is a knee-

length dress with full-

length sleeves.

On the more mod-

ern end of the scale, Ma-

laysia’s greatest fashion

icon is Jimmy Choo (周仰

杰), who received pat-

ronage from Diana, Prin-

cess of Wales.

Music

Both Malaysian popular

music and contempo-

rary art music are essen-

tially Western-based

traditions combined

with local elements. In

1950s, P. Ramlee (1929-

1973) helped create a

Malaysian form that

combined folks songs

with Western dance

rhythms and styles of

both the pre-colonial

period and the period

during which Portugal

colonized the region

(1511-1641).

In contemporary genres, P. Ramlee

Sepak Takraw

Jimmy Choo


18



FUSION

Islam was introduced by traders arriving from Arabia,

China and India. It became firmly established in the 15th cen-

tury. The constitution makes Malaysia a secular country and

guarantees freedom of religion, while establishing Islam as the

"religion of the Federation" to symbolize its importance to

Malaysian society.

Relations between different religious groups are generally

tolerant. Christmas, Chinese New Year, and Deepavali have

been declared national holidays alongside Islamic holidays

such as Muham-

mad's birthday.

Famous peo-

ple

Perhaps the

most famous living

Malaysian is the 34

year-old model,

actress, TV host

and brand ambassa-

dor Amber Chia

(谢丽萍). Winner

of the Guess

Watches Timeless

Beauty Internation-

al Model Search

2004 title, Amber

has appeared in

over 300 magazine

covers, catwalk on

runways in 6 conti-

nents, starred in 7 movies, authored 2 books, and appointed

ambassador for over 30 brands.

Actress Tan Sri Michelle Yeoh is known for her roles in

the 1997 James Bond film Tomorrow Never Dies and martial

arts film ―Crouching Tiger, Hidden Dragon”. In 2008, she was

ranked the greatest action heroine of all time by the film criti-

cism website Rotten Tomatoes. She was listed by People maga-

zine (the only Asian actress to be listed) as one of the ―35 All-

Time Screen Beauties‖ in 2009.

to volleyball or badminton except players cannot use their

hands.

In terms of international competition, Nicol David is a

Malaysian professional squash player who, starting in August

2006, was the world number one for a record 108 consecutive

months. She

has won the

World Open

title a record

8 times. Con-

sidered by

some to be

the greatest

women's

squash player

of all time, she

is perhaps Malaysia’s best loved sports star.

Badminton player Lee Chongwei was ranked No. 1 in the

world from just after the Beijing Olympics in 2008 to just be-

fore the London Olympics in 2012, though he finished runner-

up in both to Chinese rival Lin Dan. In Rio this year, he over-

came Lin in a nail-biting semi-final, only to lose the final and

miss out on becoming Malaysia’s first ever Olympic gold med-

alist.

Religion

Malaysia is a multicultural and multi-confessional country.

As of the 2010 Population and Housing Census, 61.3 percent

of the population practices Islam; 19.8 percent Buddhism; 9.2

percent Christianity; 6.3 percent Hinduism; and 1.3 percent

traditional Chinese religions.

Nicol David

Amber Chia


19

From Stravinsky to Solzhenitsyn

By Kevin McGeary

FUSION

through the woodlands of Eastern Europe. These tribes who

shared a common Slavic language had by the 7th century split

into western, southern and eastern branches, the latter

stretching from the Dniester River to the Volga and the Baltic

Sea.

Under Viking rule, a capital was established in Kiev. The

new princedom was named Rus, most likely derived from a

Nordic word meaning ―men who row‖. Though the

princedom thrived due to rich resources and strong trade

partnerships, the decline of Constantinople, hit its economy

severely.

In 1237, 35,000 mounted archers led by Batu Khan

sacked the princedom’s cities before moving further west. A

remote trading post known as Moscow would gradually grow

to challenge Mongol power, conquering and absorbing

territories of its fragmenting empire to the East.

Cyrillic

The Cyrillic alphabet owes its name to the 9th century

Byzantine missionary St. Cyril, who, along with his brother,

Methodius, created the first Slavic alphabet—the Glagolitic—

in order to translate Greek religious text to Slavic. Based on

the Greek ceremonial script, the original Cyrillic alphabet

included the 24 letters of the Greek alphabet and 19 letters for

sounds specific to the Slavic language.

The very existence of the Cyrillic alphabet in Russia was

once under threat. In 1919 there was an idea to replace it with

the Latin one and bring it into harmony with the alphabet used

in Western countries. That could have made the process of

learning Russian much easier for some, but this was not to be

and we can still enjoy the masterpieces of Russian literature in

July saw Midea open its first brand store in Moscow,

following on from last year when Midea was an official sponsor

of the FINA Games which were held in the Russian city of

Kazan. Midea’s brand recognition and revenue are both

expected to grow significantly in Russia over the coming years.

As an economy, Russia has seen a resurgence in the early

21st century after a 1990s slump. Here are some things you

may not have known about the world’s largest nation.

How did Russia become so big?

In the first millennium AD, a large group of tribes spread

A map of Russia from 924


20

From Stravinsky to Solzhenitsyn (Cont.)

By Kevin McGeary

FUSION

masterpieces of the Soviet era.

Composers

Russia is a major contributor to Western Art Music. The

Mighty Handful was a group of prominent 19th century

composers active in Saint Petersburg who strived to produce a

specifically Russian kind of classical music. The group met

from 1856 to 1870 and consisted of Mily Balakirev (the

leader), César Cui, Modest Mussorgsky, Nikolai Rimsky-

Korsakov and Alexander Borodin.

Around the same time, Pyotr Ilyich Tchaikovsky created

a body of work that placed him as arguably the most popular

―classical‖ composer of all time. His best known works

include the ballets ―Romeo & Juliet‖ and ―Swan Lake‖.

More recently, Igor Stravinsky’s ―The Rite of Spring‖,

which premiered to riots in Paris in 1913, is one of the seminal

works of the modernist era. The piece would go on to leave an

indelible mark on jazz, minimalism, and other contemporary

movements. His contemporary Dmitri Shostakovich was also

among the most innovative musicians of the time.

Space exploration

The Soviet space program comprised the rocketry and

space exploration programs conducted by the former Soviet

Union from the 1930s until 1991. Over its sixty-year history, it

their original script.

As of 2011, around 252 million people in Eurasia use it as

the official alphabet for their national languages, with Russia

accounting for about half of them. With the accession of

Bulgaria to the European Union on January 1, 2007, Cyrillic

became the third official script of the European Union,

following the Latin and Greek scripts.

Authors

The most celebrated

period of the Russian novel

was the 19th century, which

produced some of the

undisputed masterworks of

world literature. Russian

classics are defined by

formal innovation and

philosophical exploration.

The Russian language

has given the world

nineteenth century novelists

Leo Tolstoy (War & Peace,

Anna Karenina) and Fyodor

Dostoevsky (Crime &

Punishment, The Brothers Karamazov) to masters of the short story

such as Anton Chekhov and Nikolai Gogol. Some of

Chekhov’s great quotes include ―Any idiot can face a crisis - it's

day to day living that wears

you out‖; and ―If you are

afraid of loneliness, don’t

marry.‖

In the twentieth and twenty-

first centuries, Russian

authors Boris Pasternak,

Mikhail Sholokhov,

Aleksandr Solzhenitsyn,

Joseph Brodsky, Svetlana

Alexievich have won the

Nobel Prize for Literature.

Pasternak’s Dr. Zhivago and

Solzhenitsyn’s Gulag

Archipelago are among the great

Igor Stravinsky

Leo Tolstoy

Boris Pasternak


21


By Kevin McGeary

FUSION

established in Kievan Rus. The great churches of Kievan Rus',

built after the adoption of Christianity in 988, were the first

examples of monumental architecture in the East Slavic

region. The architectural style of the Kievan state, which

quickly established itself, was strongly influenced by Byzantine

architecture. Early Eastern Orthodox churches were mainly

built from wood, with their simplest form known as a cell

church. Major cathedrals often featured many small domes,

which has led some art historians to infer how the pagan Slavic

temples may have appeared.

Throughout the Muscovite periods and the imperial

period, Russian architecture adopted more influence from

Mongolia, the Middle East and the Netherlands. Today its

most iconic buildings include Saint Basil’s Cathedral in Red

Square, the Kremlin, Catherine Palace in St. Petersburg and

The Winter Palace, in which Midea has installed its

commercial air conditioning.

Cuisine

Russian cuisine derives its varied character from the vast

and multi-cultural

expanse of Russia. Its

foundations were laid

by the peasant food of

the rural population in

an often harsh climate,

rich local resources

provided the

ingredients for a

plethora of breads,

pancakes, pies, cereals, beer and vodka.

Popular Russian dishes include Rassolnik, a hot soup in a

salty-sour cucumber base; Pelmeni, minced meat wrapped in

dough; and Kotlety, small pan-fried meatballs similar to

Salisbury steak.

Sport

Since the Olympic Games in Helsinki in 1952, Russia has

been in the top four in the medal table at every Summer

was responsible for a

number of pioneering

accomplishments in

space flight, including

the first intercontinental

ballistic missile, first

satellite, first animal in

Earth orbit, first human

in space, first woman in

space, first spacewalk,

first Moon impact, first

image of the far side of

the moon and unmanned

lunar soft landing, first

space rover, first sample

of lunar soil, and first

space station.

In the 1990s, Russian

space exploration was in a rut, but today Roscosmos, the

governmental body responsible for the space science program

of Russia and general aerospace research, is overseeing

something of a renaissance, including a number of research and

aerospace programs.

Architecture

Russian architecture follows a tradition whose roots were

The Winter Palace, which contains Midea air conditioning

Kotlety

Yuri Gagarin, the first person in space


22


By Kevin McGeary

FUSION

occasions.

Banya

Banya, a Russian type of sauna, a kind of steam bath, is

one of the oldest Russian traditions. It is a popular form of

relaxation and bonding.

A Russian banya has a special room, where a large

amount of hot steam is created with the help of water and hot

air. Inside the banya, which is usually built of wood, there are

wide wooden benches along the walls. They are built one

above the other like steps. The higher up the bench the hotter

the air. Once someone has warmed up well enough, he or she

leaves the steam room and dips into a pool of cold water.

Wildlife

Russia contains the planet's largest expanse of forest,

over eight million square kilometers of mixed woodlands that

are home

to rare

carnivores

including

tigers,

bears and

leopards.

According

to the Red

Data

Book of

the Russian

Federation, as of 1997, the country had 266 mammal species

and 780 bird species under protection.

In the Russian Far East the mammals reportedly spotted

include brown bears, Eurasian lynx, and red deer, Amur tigers,

Amur leopards, and Asiatic black bears. There are also about

350 bird species and 30 percent of all endangered species in

Russia are found there which include 48 unique endangered

species.

Olympics. It was top two in most. According to Yandex search

analysis: "Football topped the list of the most popular sports in

Russia". Ice hockey came in second with basketball, boxing,

auto racing, volleyball, athletics, tennis and chess rounding out

the top ten. Other popular sports include bandy, biathlon,

figure skating, handball, weightlifting, gymnastics, wrestling,

martial arts, rugby union,

and skiing.

In football The Soviet

Union won the inaugural

European Championship in

1960, beating Yugoslavia 2-

1 in the Paris final. Their

number one that day was

Lev Yashin, nicknamed the

"Black Spider", who is

widely believed to be the

greatest goalkeeper in the

history of the game.

According to FIFA, Yashin

saved over 150 penalty kicks

in professional football – more than any other goalkeeper.

Russia’s men’s ice hockey team won gold at the world

championships on five occasions between 1993 and 2014. One

of Russia’s greatest hockey players was Sergei Fyodorov. He

played in the National Hockey League (NHL) for the Detroit

Red Wings, with whom he won the Stanley Cup on three

Lev Yashin

Banya

Siberian tiger


23

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