EDITOR'S BLOG
How corporate copping off will transform the lighting business

The day Joseph Swan and Thomas Edison stopped arguing in 1883 and joined forces to form the Edison & Swan United Electric Light Company was the last major strategic shift that happened in this industry

But make no mistake: another, no less dramatic, realignment is happening before our eyes. It’s corporate speed dating on an unprecedented scale in the lighting business – and no one wants to get left on the shelf.

The dry name the City boys use is ‘vertical integration’. And lamp, luminaire and gear companies are doing it with all the urgency of hormonal teenagers attempting to cop off before closing time on a Friday night in Walkabout.

The realisation has dawned that there’s no future in being a specialist. The days when you bought your light sources from one company, your electronic control gear from another and your fittings from another are coming to a close – thanks to LEDs. Nowadays it’s all got to be rolled into one integrated unit.

It’s not as if we didn’t try to preserve the old business model. If the Zhaga initiative had managed to standardise the LED module into the definitive 21st century version of an lamp – interchangeable no matter what brand – then maybe the old divisions would have continued. But it looks like there’ll be lots of proprietary modules. If you buy your LED luminaries from Company X, Company X will get any replacement module business.

So you’ve got be the first to the client. Philips realised all this a long time ago – hence its spending spree of Coleen Rooney proportions. Its purchase of Indal, parent of WRTL, the exterior luminaire maker, is just the latest in a long line of acquisitions, mainly of luminaire makers, that will make it the most vertically integrated of the major players by a country mile.

But others are catching up – and how. Lamp maker GE has bought Lightech, the Israeli control gear maker, for a purchase price that is believed to be about £16 million. But the real eye-catching corporate copping-off of the summer is LED maker Cree’s purchase of US exterior and industrial luminaire brand Ruud.

The purchase price is a stonking £225 million in cash and £127 million in shares. But stick around. We’re expecting more big-name purchases this autumn – and many more large cheques.

RELATED
Why we should look at lighting in a different way

We’ll need to budget for an extra million pounds next year’

RELATED
When it comes to cutting energy, money talks

So energy prices are soaring. Good