Osram sale ‘will lead to takeovers’

The sale of Osram will lead to a flurry of merger and acquistion activity in the lighting industry, it has been signalled.

Siemens chief Peter Loescher, who is selling Siemens’ majority holding in Osram in a public flotation later this year, hinted that an independent company would buy manufacturers of luminaires and controls, and form strategic partnerships.

Leoscher expects Osram to buy and work with luminaire makers

‘There will be a lot of opportunities for collaboration with other companies,” said Loescher. Kepler analyst Peter Olofsen said he expects Osram to target more fittings companies in Europe, where many players are only active in parts of the market or a limited number of countries.

The flotation of Osram could raise up to £3 billion from investors.The move is part of a wider reorganisation of Siemens divisions by Löscher. Osram – the second-largest lighting company in the world after Philps, and the world leader in car lighting – isn’t seen as part of Siemen’s core business and is the only division not to carry the Siemens brand.

In February, Osram bought the technical German fitting maker Siteco, which fills out its luminaire offering and makes it more attractive to potential investors. It also makes Osram’s offer more comparable to rival Philips, which has increased its vertical integration with a string of luminaire brand purchases. In 2008 Osram bought LED specialist Traxon.

The global lighting market for components, luminaires and lighting systems is estimated by analysts at around £38 billion, over two-thirds of which is accounted for by luminaires and lighting systems. Driven by LEDs, the total market is expected to grow to around £55 billion by the year 2016.

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