Siemens Said to Explore Sale of Osram Stake to China’s GO Scale

  • GO Scale may mull bid for all of Osram after buying 17% stake
  • Stake said to draw interest from other Chinese, buyout firms

Siemens AG is considering a sale of its remaining stake in lighting business Osram Licht AG, valued at 866 million euros ($972 million), to potential buyers including Chinese investor GSR GO Scale Capital, according to people familiar with the matter.

A deal for the 17 percent stake in Osram could be announced as early as this month, the people said, asking not to be named as the details aren’t public. GO Scale could use the purchase as a potential first step to increasing its stake further or making a takeover offer for the rest of Osram, which has a market value of about 5.1 billion euros, the people said. No decisions have been made, and GO Scale could still walk away, they said.

GO Scale Chairman Sonny Wu said in an interview Monday the company is interested in exploring a potential opportunity with Munich-based Osram, declining to comment further. The stake has also drawn interest from other Chinese bidders as well as private equity firms, two of the people said.

Spokesmen for Siemens and Osram declined to comment.

Soured Relations

Siemens’s exit from Osram would come after a souring of relations during the past year between the companies’ management. Siemens Chief Executive Officer Joe Kaeser publicly questioned his counterpart’s decision to invest heavily in a manufacturing facility in Malaysia, a plan that also took Osram investors by surprise and weighed on the stock price. Kaeser has complained that Osram CEO Olaf Berlien has destroyed shareholder value with the strategy and Siemens used a shareholder meeting in February to criticize Berlien’s performance.

Osram shares rose 10.1 percent, the biggest gain in more than three years, to 48.655 euros at the close Monday in Frankfurt. Munich-based Siemens fell 1 percent to 103.80 euros.

Siemens spun off the lighting manufacturer in 2013 as it sought to divest businesses with low profitability or growth prospects. Selling the remainder of Osram would cut ties with one of its few remaining consumer-facing assets after a decade spent sharpening its focus on industrial applications like high-speed trains, hospital equipment and products for the energy industry.

Since the spin off, Osram has cut more than 7,800 jobs and in July agreed to sell its general lamps unit to a Chinese consortium including light-emitting diode maker MLS Co. for 400 million euros to concentrate on technology for buildings, cars and cities.

Third Attempt

If successful, the bid would be the third time GO Scale has made an offer for a European lighting company since 2015. GO Scale’s bid for Royal Philips NV’s lighting-components unit Lumileds was blocked by a U.S. security panel this year, after which it had tried to bid for the Dutch company’s other lighting division, people familiar with the matter have said. That business was eventually sold through an initial public offering.

A re-shaping of the lighting business comes as consumers increasingly replace traditional bulbs with more energy-efficient and longer-lasting LEDs. During the transition, Philips Lighting is facing increasing competition from Asian producers of the technology as well as a drop in prices. In its July earnings report, Philips Lighting said LED-based sales rose 25 percent in the latest quarter and now account for more than half of the company’s revenue.

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