The Osram Case
From the Innovation Hunter to the Hunted
Osram was restructuring towards technology-driven markets when it become reday to be taken over. How did this come about? And will the innovation course be continued?
The two financial investors Bain and Carlyle are offering EUR 35 per share. The Osram Executive Board supports the offer and rates it as an »attractive bonus« for its shareholders. Today, it shares the opinion of the stock market analysts of the time. When Osram went public as an independent company, analysts estimated the fair value of the Osram share at between 32 and 40 euros.
From this perspective, the company has not really changed. From another point of view, even more so: five years later, the 5,3 billion euros turnover of 2013 turned into only 3,8 billion euros. Today, the company is much more profitable. At EUR 141 million, profits have more than quadrupled, although of course the company is still a long way from achieving its targets. And the price for this alone was almost ten thousand fewer employees, in other words a massive restructuring.
Noisy restructuring
Noisy reconstruction
Since 2015, Olaf Berlien has been driving this forward as Chairman of the Executive Board with a quick step, but not always in the best agreement with the shareholders. The decision to invest around 1 billion euros in a new chip factory in Malaysia caused a sensation. He thus became much more involved in the highly competitive market for standard LED chips than many investors would have liked. Major shareholder Siemens reacted quickly. At the Osram Annual Shareholders' Meeting, he refused to ratify the actions of the Managing Board – a slap in the face in the shareholder's language.
The reason for this was that Berlien did not actually want Osram to be a pure chip manufacturer for general lighting, but to serve the technology-driven markets. The Munich-based traditional group is to become a »photonics champion« and move away from its original focus on general lighting. In short: high-tech pixel high beam instead of low-budget LED luminaire.
After only Six Years off the Stock Market?
With the sale of Ledvace and Siteco for several hundred million euros, the lighting business was consistently divested. Investments are being made in the automotive market, digital services and the development of new technologies. Companies such as the British Ring Automotive were taken over and a stake was taken in the Berlin-based tracking specialist Square Metrics.
As a price correction against the downward trend, this has not yet borne fruit. In the last 18 months, sales have fallen so sharply that the innovation hunter has now become the hunted takeover candidate. Only six years after the IPO and the independence of Siemens, the traditional Munich-based company will most probably be taken over by the two US financial investors. There is also the option of taking Osram off the stock exchange. Beyond the quarterly control of sales, the group's executive board would have more peace of mind for the reorganisation in the direction of photonics.
- From the Innovation Hunter to the Hunted
- New Board of Management and Break-Up?
