The German Siemens Group (Siemens) intends to get rid of the German lighting giant Osram's shareholding news for a long time, until recent developments. Siemens announced on October 4th, German time, decided to sell 17.34% of the shares of OSRAM, ending the relationship between the two sides for many years.
According to Reuters, Siemens holds a total of 18.15 million shares of Osram. According to Reuters, each share will be sold at 65.05 euros, with a total selling price of about 1.2 billion euros (about 9.4 billion yuan). According to Siemens, the proceeds from the sale will be used for general corporate purposes, and only a small amount of Osram shares will be retained after the above shares are held. These shares are the company's debt-bearing corporate bonds due in 2019.
Why does Siemens leave the Osram shares?
In November 2015, OSRAM announced that it will invest 2 billion euros (NT$71 billion) in the development of white LED chip technology and plans to spend 1 billion euros (NT$35.8 billion) to build a new LED chip factory in Malaysia.
Siemens CEO Joe Kaeser publicly questioned Osram’s decision to invest heavily in Malaysia, which “shocked†Osram’s investors and Osram’s share price suffered a setback. Kaeser complained that Osram CEO Olaf Berlien was destroying shareholder value. In addition, Siemens attacked Berlien at the February 2016 shareholders meeting.
Kaeser said: "I am very dissatisfied. Osram's 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."
Since the separation of OSRAM from Siemens in 2013, Siemens remains the largest shareholder of OSRAM and holds a 17% stake in the former subsidiary. Since then, Osram's share price has climbed from a single 26 euros (NT$929) to more than 55 euros (NT$1,966). However, shortly after Osram announced the new strategy, the German lighting company's share price began to suffer heavy losses.
Due to differences in development strategies, the management of the two sides has contradicted. As the relationship between the two managements became stale, Siemens then withdrew from OSRAM.
Siemens tried to separate the low-profit or low-growth business, and separated the lighting manufacturers in 2013. After focusing on industrial applications such as high-speed trains, medical equipment and products, the sale of the remaining shares of OSRAM will reduce Siemens's remaining consumer-facing assets by one.
Who is likely to become a "taker"?
Last year, Chinese consortiums including Sanan Optoelectronics and Jinshajiang Venture Capital and the German horse brand had intentionally took over Osram, but in the end they failed.
DPA reported on September 12 last year that according to industry news, the Siemens Group is considering selling its remaining 17% of OSRAM shares to China. The potential purchaser is GSR Go Scale Capital. In an interview with Bloomberg, Jinshajiang Venture Capital expressed its interest in OSRAM and considered further expansion of its shareholdings and possible acquisitions after receiving shares from Siemens.
The German "Focus" weekly reported that Chinese investors are interested in acquiring Osram, a German lighting manufacturer. Now a number of Chinese companies have come to the Munich headquarters to knock on the door and get in touch with Siemens, the former parent company of OSRAM. Siemens still owns 17.5% of Osram. The report pointed out that in addition to the Chinese-funded consortium GSR Go Scale Capital, there are also Xiamen-based semiconductor manufacturer Sanan Optoelectronics. And Sanan Optoelectronics has also said that there is initial contact with Osram on this matter.
In addition, the German business magazine revealed that the German auto parts business Continental (Continental) was interested in acquiring the 17% Osram holdings in the hands of Siemens in the summer of 2016, but it seems to be unsuccessful. The report pointed out that the German horse bid to buy up to 17% of Osram shares to Siemens at a price of 50 euros per share, which may also be the last chance for OSRAM to continue to be a German businessman. From June to August 2016, Osram's share price usually swings between 42.58 euros and 51 euros.
Although the above potential acquisitions have not been successful, many potential buyers have “knocked the door†to fully reflect the value of OSRAM. This time, Siemens publicly announced that it will sell 17.34% of Osram's shareholdings, which will inevitably lead to many buyers rushing. It is still unknown whether Chinese capital can “catch the beautyâ€.
What kind of "difficulties" will Chinese capital encounter?
The Osram share held by Siemens is of great appeal to many Chinese companies. If Chinese companies successfully win the stake in Osram, Chinese companies will gain deep technical resources. In addition, as one of the international lighting giants, Osram's brand influence and overseas channels will also become an effective thrust for Chinese LED companies to “go globalâ€.
It can be said that if Chinese companies can successfully buy Osram, the global LED industry situation will change, and the global status of China's LED industry will rise to new heights.
However, as far as the current situation is concerned, it is not easy for Chinese investors to purchase Osram. The biggest uncertainty in this acquisition is the German government. Such concerns are not unreasonable. Recently, land capital has frequently acquired and consolidated the international technology giants, which has caused the US and European governments to be highly vigilant.
Prior to this, there were also domestic manufacturers' cross-border acquisitions that were blocked by the local government. The case of Jinshajiang Venture Capital's acquisition of Philips Lumileds suffered a stuck case. In January last year, Philips announced that it had stopped selling Lumileds (LED and automotive lighting) business to Chinese investors due to opposition from US regulators. Coincidentally, Fujian Hongxin Investment Fund (FCG) acquired Aixtron, a German semiconductor equipment manufacturer, and was also worried by the government and public opinion that the outflow of high-tech technology jeopardized national security, which led to the end of the overseas acquisition.
After the news that Sanan Optoelectronics had to acquire Osram, the news about the German government or obstruction also followed. According to German media reports, the German economy minister stated that if the news is true, the German government will oppose the acquisition.
Therefore, it is conceivable that the obstruction from the German government will be the biggest obstacle for Chinese companies to bid for the shareholding of OSRAM held by Siemens.
In addition, huge bidding funds will be another major problem facing Chinese lighting companies. The 17.34% stake in OSRAM held by Siemens is about 1.2 billion euros (about 9.4 billion yuan), which has exceeded the total assets of most LED companies in China. For most companies, if they want to bid for this part of the equity, they still need to find ways to obtain sufficient financing, or to unite with other capital forces.
In addition, Chinese capital still needs to face many powerful international capital forces. In the process of bidding for Philips lighting components and automotive lighting business, such as Jinshajiang Venture Capital, it has also encountered the “encirclement and suppression†of international forces such as Blackstone Group and Onex.
It can be said that if Chinese capital wants to participate in the bidding, the difficulty of success is not small.
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