The Strategist

Siemens to get rid of Osram

10/05/2017 - 11:58

Siemens is getting rid of all shares of high-tech German lighting manufacturer Osram. The remaining stake of 17.5% (18 million shares) will be sold to investors for 1.2 billion euros, Der Spiegel reports.

Honza Groh
Honza Groh
"We chose the right date to sell the rest of the company's shares, and now Osram is on its own," said a representative of Siemens.

High-tech German lighting company Osram was a subsidiary of Siemens from 1978 to 2013. Four years ago, Osram transferred its lighting equipment production business to a new legal entity, retaining a share of 17.5%.

To sell the remainder of Osram shares now will become a very good deal for Siemens, experts say. Over the past four years, Osram shares have risen in price by almost 3 times. In 2013, one security cost 24 euros, now it numbers more than 65 euros. However, Siemens has not yet succeeded in getting rid of all the shares of Osram. Some of the securities will need to be left to serve an option loan, which expires only in 2019.

Last year Osram’s Chief Executive Officer Olaf Berlien and Siemens’ CEO Joe Kaeser failed to agree on a strategy for the further development of the lighting manufacturer. At the general meeting, the head of Osram said that in his understanding, the company should focus on the production of LED chips, and put up their traditional business of producing lighting lamps for sale. Joe Kaeser, who is a major shareholder in Osram, called this strategy too risky.

Recently Olaf Berlien thanked Joe Kaeser for "accompanying and performing the role of the anchor shareholder from the very moment the company entered the stock exchange and during its transformation into a high-tech enterprise."

Previously, Chinese manufacturer of LED chips San'an Optoelectronics expressed interest in Osram. In early October last year, the Chinese reported that they are negotiating accordingly. The proposed deal has alarmed the German authorities, who were trying in every possible way to stop China's expansion into the EU.

German Economy Minister Sigmar Gabriel, during his visit to Beijing last November, expressed concern over M&A deals between German and Chinese companies and restricted access for German firms to Chinese markets. Gabriel's statements played a role: the interest of Chinese investors in the absorption of the German company engaged in the production of Osram Licht AG lighting equipment has cooled against the backdrop of signs of growing political opposition to foreign investments in Germany.