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By Jack Keough
In what had been regarded as one of the largest spinoffs in the electrical industry, Osram Lich AG has started trading on the Frankfurt and Munich stock exchanges under the symbol “OSR.”
The trading of Osram stock came as the result of its successful approval of the spinoff by Siemens AG.
With this move Siemens AG shareholders received 10 Osram shares for each share they own. A total of 80.5 percent of the more than 100 million no-par-value registered shares were available for sale. Siemens AG holds 17 percent of the capital stock of OSRAM Licht AG; a further 2.5 percent of the shares were transferred to the Siemens Pension Trust e.V. With a shareholder base of more than 700,000 investors at the start of trading, Reuters reported. Osram is one of the major publicly traded stocks.
Osram, as an integrated lighting expert, is one of the largest players in the lighting market and positioned throughout the value chain, from LED chips, lamps, lights and light management systems to lighting solutions and the service business. The company says that it generates more than 70 percent of its revenue with energy-efficient products that are part of its certified environmental portfolio. LED-based products today already account for more than 25 percent of overall revenue, which amounted to €5.4 billion last fiscal year and to €2.678 billion in the first half of the current fiscal year 2013.
The spinoff had been approved by separate general meetings of Siemens AG on Jan. 23rd and Osram Licht AG on Jan. 21st. The spinoff originally was to take place much earlier but was postponed because of market conditions and later postponed because of a lawsuit.
Osram issued 104.7 million shares at 24 euros ($30.8) per share in its initial public offering (IPO), the German lighting company said. The IPO valued Osram at about 2.5 billion euros – considerably less than the 3.23 billion euros Siemens had initially expected to earn from the listing, according to various news reports.
At the opening, the shares soared but quickly dropped about 2.5 percent. “That is just a snapshot,” Osram finance chief Klaus Patzak told Reuters. “The share price and the valuation will settle over the coming weeks.”
The company announced in late November, and as reported in tedmag.com that it intended on eliminating 8,000 positions. Many of those jobs were in Europe but some were in the U.S. It will also close about 12 factories.
Osram is in the midst of reorganizing its businesses. The company said that the lighting industry is in the midst of a rapid change from conventional to LED lighting products and that was causing Osram to re-examine its business operations and will lead to the company selling off many of its unprofitable facilities abroad.
The company expects to save up to $1 billion euros ($1.3 billion) through 2015 as a result of those actions and job cuts.
Just two months ago, Osram said it will shut down its production site in Tangerang, Indonesia by the end of December 2013, as the company continues to push ahead with its corporate realignment. In Tangerang, Osram manufactures traditional products, mainly incandescent lamps, with some 1,100 employees.
Osram is building up capacities in the LED area. This includes an investment over 100 million euros in a new LED assembly plant in the Chinese city of Wuxi. Osram views Asia as the most important key market of the future, especially with regard to the expected LED development in the region.
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Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com
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