Siemens or the sale of the remaining 17% of Osram's shares in Jinshajiang and other Chinese investors or takeover
According to Bloomberg News, Siemens is considering selling its remaining 17% stake in OSRAM, worth 777 million euros, or about $872 million, and potential buyers include Chinese investor Jinshajiang Venture Capital.
Earlier, Philips announced that it had stopped selling 80% of Lumileds' shares to Jinshajiang Venture Capital due to opposition from CFIUS, the US national security approval authority.
It is reported that the equity transfer has also attracted other Chinese investors, including some PE institutions. It is rumored that this transaction will be announced as soon as this month.
Siemens CEO Joe Kaeser has previously publicly questioned OSRAM's plans to invest heavily in expanding LED projects in Malaysia. Joe Kessel complains that the CEO of Osram has undermined the strategic value of shareholders.
"On the one hand, the two sides have inconsistent ideas; on the other hand, Siemens' expectations for OSRAM, especially the possible gains from OSRAM's investment in lighting LEDs, are not very optimistic," said Wang Gaoyang, deputy general manager of Hongli Zhihui (300219). This incident will basically not have much impact on the current global LED industry landscape.
In the view of Song Dong, vice president of Jingke Electronics, some foreign LED companies have reached a certain bottleneck in development. This part of the sale is not their core business. With the rapid rise of China's LED chip and packaging companies, the market competitiveness of OSRAM lighting LED devices is getting weaker.
However, mergers and acquisitions can still allow Chinese companies to leverage on their strong capital advantages to acquire patents from OSRAM Opto Semiconductors. Prior to this, OSRAM's spin-off of the general lighting business assets (Lund Vans) has been awarded the bidding of Mulinsen (002745), IDG and other consortiums.
This asset sale lasted for 4 years.
In November 2012, Siemens announced the divestment of the independent public listing of the OSRAM lighting business.
According to Siemens, the listed transaction will first require Siemens to divest 80.5% of Osram's equity, and Siemens shareholders will participate in the divestiture of one share of Osram's shares for every 10 shares. Osram will be listed and traded later.
Siemens will continue to be a major shareholder of Osram, the group itself will continue to directly hold a 17% stake in the new company after the listing, and the Siemens employee pension insurance trust will hold a 2.5% stake.
But at the same time, Siemens said it reserves the possibility of continuing to sell this 17% stake.
At that time, there were institutional predictions that after Osram was listed separately, more funds would be available and a more flexible organizational structure would be used to grasp the opportunities for the rapid spread of global LED lighting. It is expected that OSRAM will increase its efforts to expand the LED lighting market in the Chinese market.
"The LED chip industry is very 'burning money'." An Osram middle-class backbone in China said that the separation of OSRAM has been discussed for three or five years, and now it has finally achieved spin-off listing, which is conducive to Osram's increased investment and consolidation of industry status.
At that time, China's LED upstream chip industry was still in a period of rapid growth, and a large amount of equipment investment and technology introduction did not attract the attention of domestic giants.
"Philips, Osram, Cree and other global LED chip giants want to expand the site, the application market has become the focus of competition. Osram will also strengthen the channel expansion in China's LED lighting market." At that time, several major international lighting giants China's competition will become more intense, and the pressure on China's domestic LED chip companies will increase.
Before the announcement of the spin-off, a spokesman for OSRAM said that Osram will invest hundreds of millions of euros in the new plant in the next few years.
The new factory's LED chip package expansion will begin at the end of 2013, and the plants in Regensburg, Germany and Penang, Malaysia will continue to produce chips. It will employ up to 1,600 employees after full production. At the same time, OSRAM signed a factory construction agreement with the Wuxi New District Management Committee.
Siemens and Osram renewed controversy
However, the overconfidence of its own technical strength and market competitive advantage has caused a lot of disputes between OSRAM and its major shareholder Siemens.
At the end of 2015, a director of OSRAM Opto Semiconductors revealed that despite the low market profit of general lighting products, the company has found a strategy to enhance the profit of general lighting products through OSRAM's own comprehensive effect advantages, so it decided to expand production. Line and reduce the production cost of the overall LED chip.
According to OSRAM's publicly disclosed strategy, in the 2020 fiscal year, the chip revenue for outdoor lighting and other general lighting applications is twice the current share, which is to increase to about one-third. In addition to reducing costs, the expansion of the LED chip production line can also keep the semiconductor business's operating profit ratio at an average level of more than 15% in the medium term.
Osram had previously announced that it would spend 3 billion euros, about $3.3 billion in research and development, and a new 6-inch LED chip line at Kulim, a Malaysian base in Southeast Asia.
In an interview with the German media, Siemens CEO Joe Kaeser once again stressed that the statement was not aware of Osram's investment strategy and expressed dissatisfaction with the continued decline in Osram's share price since the announcement of the new white LED chip development program in November 2015.
Kaeser said: "Of course I am very dissatisfied. The OSRAM policy direction has caused the stock price to fall by almost 30%, and the value of the OSRAM stock held by Siemens has evaporated from 9.4 million euros to only 6.8 million euros."
After the major shareholder Siemens did not agree with Osram's new business strategy, the German media reported new news. Siemens intends to clear the Osram holdings in its hands, and may be sold to Asian investors.
As soon as the news came out, the manufacturers in Korea, China and Taiwan were all named to participate in Osram.
However, some market participants believe that Siemens, the largest corporate shareholder of OSRAM, continues its previous dissatisfaction with the OSRAM management decision. The sale of equity may be just a call, with the aim of re-election of the board of directors, which may change Osram's original business policy.
This time Siemens is really moving.
Siemens originally hoped that the only remaining global company focused on lighting could focus on the automotive and specialty lighting markets after deciding to break away from its declining lighting business.
In the view of Siemens, the continued investment in white LEDs is risky, and Osram is worried that he will be in the highly competitive outdoor lighting and home lighting market.
Because another multinational giant, Philips, has also listed its lighting division, trying to focus on core businesses such as medical scanners and medical technology.
In recent years, due to the fierce price competition brought by the rapid expansion of production capacity of China's LED upstream chip companies, the market share of foreign LED companies including Osram has been squeezed.
In addition, the price of the downstream lighting application market is declining year by year, and the price of upstream chips is constantly being pressured.
Liu Wei, president of Huacan Optoelectronics (300323), said that the price of LED chips has dropped 10 times in the past three years. The LED industry competition will continue.
At the same time, China's first few chip factories have seized the technology reserves and market share in the past few years, especially through the capital market to improve their management and improve their financing capabilities. Real participation in international competition will be a major trend in the next few years.
This makes foreign chip companies including Osram very uncomfortable, especially the competition for ordinary lighting white LEDs is more intense.
Osram apparently did not give up the multiple-legged mode.
Earlier this year, OSRAM announced the expansion of its special lighting (SP) business and the acquisition of Novità Technologies, a US automotive LED module manufacturer.
The Tennessee-based automotive lighting company has an annual revenue of 40 million euros (about 294 million yuan) and has about 100 employees.
Let Siemens make up its mind, perhaps also related to Osram's financial situation this year.
According to the latest 2016 second quarter results, OSRAM's revenue for the quarter was 1.442 billion euros, up 6.6% year-on-year; net income was 28 million euros, down 56.8% year-on-year.
According to the Siemens sales price, Osram's overall valuation is 4.57 billion euros, or about 34.293 billion yuan.
According to industry insiders, the Jinsha River is an investment institution, and the perspective of things will be different. Therefore, his series of mergers and acquisitions, more is still to consider the future thinking of several LED companies that have invested before. After all, it has been hampered by a certain industry for a long time. For the LP of the PE organization, the pressure is also great.
Prior to this, Jinshajiang has repeatedly announced the listing plans of several of its investment LED companies, but they have not been fulfilled. Following the failure of the earlier acquisition of LUMILEDS, this shot is also a stepping stone for the future of several LED companies investing in China.
At present, overseas acquisitions by Chinese companies are not rational enough. In fact, 99% of China's acquisition of foreign companies failed because they only bought external brands, but did not really buy their core technology.
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