Recently, according to the German Economic Weekly report, the German government rejected a request from a Chinese consortium to acquire part of the business of the old German lighting giant Osram (Lund Vans).
Earlier this year, OSRAM agreed to sell its general lighting business subsidiary LEDVANCE to the Chinese consortium for more than 400 million euros.
Gaogong LED learned from people familiar with the matter that the German government is relatively cautious about the current series of Chinese acquisitions of German companies due to the recent fermentation of Aixtron mergers and acquisitions into safety-related technical issues. For various reasons, the German government hopes that the Chinese-funded consortium that purchased Landvance will be able to supplement the relevant matters.
Gaogong LED verified the matter with Mulinsen and did not receive any reply.
Concerned about the recent acquisition of German LED-related companies by Chinese companies, the TGII believes that compared to Aixtron's core equipment in the semiconductor industry, Roundmans is operating independently and seeking to sell as OSRAM. The purpose of the spin-off of the subsidiary is only the general lighting source and lighting business.
We believe that both the firm willingness to cooperate with the companies involved and the nature of the trading assets are positive for the smooth progress of the trading process.
OSRAM needs to seek a strategic partner from China: Since OSRAM entered the Chinese market in 1995, it has been tying the manufacturing and marketing segments of the lighting source and lighting business to Chinese companies. Osram Foshan Lighting Co., Ltd., a joint venture with Foshan Lighting Co., Ltd., has enabled Osram Lighting to quickly gain market share in the Chinese market.
However, at the turning point of the LED era, Osram did not make decisive strategic adjustments in a timely manner, and at the same time, the relationship with Foshan Lighting was “cut and chaotic.†Until last year, it sold its holdings of China Foshan Lighting for 350 million euros.
From the perspective of general lighting business, business revenue accounts for nearly 30% of OSRAM's total revenue, but in recent years, growth has lagged significantly behind device, special lighting and system solutions business. According to the third quarterly report, the growth rate of the general lighting business was only 3.3%, while the growth rate of the remaining businesses was above 10%.
At the same time, in the revenue contribution area, the proportion of China-based Asian business revenue is also about 30%, but the third quarter report shows that revenue growth rate also lags behind the growth rate of the other two regions.
At the same time, however, the Chinese market is undoubtedly the largest consumer market for LEDs in the future. In particular, Osram's superior automotive lighting, special lighting and other services require the establishment of its own Chinese “partnersâ€.
The acquirer and the OSRAM business are highly complementary: as one of the members of this acquisition consortium, Mulinsen is currently one of the largest LED packaging and lighting companies in China. In the Chinese market, Mulinsen has established a vast dealer network that is the future of OSRAM. The best channel resources for general lighting products.
Mulinsen can also leverage Osram's overseas brand influence and channel advantages to accelerate overseas market development. In particular, Mulinsen's scale effect and cost control ability can greatly help Osram's original lighting product line to improve cost-effective competitiveness.
More importantly, in the previous acquisition negotiations, Mulinsen signed a strategic purchase agreement with OSRAM Opto Semiconductors. According to the plan, Mulinsen will continue to purchase Osram's chips and devices at the new chip factory in Kulim, Malaysia in the next three years. This factory is an important part of OSRAM's previous investment of 3 billion euros by 2020.
For both sides, closer cooperation must be a win-win situation.
Foreign-invested enterprises represented by Osram have increasingly valued the manufacturing capabilities and production scale of Chinese companies. A LED manufacturing center centered on China is taking shape. Of course, there is also a huge Chinese market.
It is more secure to maintain operations in German factories: in the face of Chinese companies' mergers and acquisitions in Germany, some people will have one or the other prejudice and think that China is ignoring German technology and talents, but the reality is totally different.
According to a study by the Bertelsmann Foundation in Germany, Chinese investors tend to ensure the employment of German companies, rather than the transfer of technology and layoffs.
At the same time, the Chinese government's active support for the “going out†strategy has stimulated the extroversion of Chinese companies. “The government encourages domestic companies to invest overseas, open up new markets, and acquire mature international companies that are beneficial to China's industrial upgrading.â€
On the one hand, China's foreign direct investment has enabled Chinese companies to obtain shortcuts to the high-end of the value chain. On the other hand, investment targets have also gained new impetus for further development.
From the previous series of completed Chinese acquisitions of German companies, Chinese-funded enterprises are more capable of guaranteeing the normal employment conditions of the original employees, and a stronger source of funds will make the acquired party become a Chinese-funded enterprise. The “base area†for opening up markets overseas.
In a notice announcing the signing of the acquisition agreement, OSRAM stated that LEDVANCE and the Chinese consortium have a good complementary relationship in terms of global structure and product composition. Through this combination (LEDVANCE is acquired), the two will benefit from the larger market. Synergies of distribution channels and procurement.
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