China Investment Bank: OSRAM lighting business valuation of nearly 5 billion yuan

LEDinside views and comments:

LEDinside research associate Chu Yu Chao said: "OSRAM is unlikely to cause partial sale of two lamps, the two lamps for the same business sales channels, while the mainland manufacturers can borrow from the lamp business acquisition of OSRAM, the successful expansion of international sales channels. "

In November 6, 2015, it was rumored that OSRAM was starting to sell its lighting business, including traditional lamps and LED lamps, and the most interested buyers were mainland manufacturers.

Estimated investment bank Chinese, OSRAM traditional light bulbs, rectifier (Classical Lamps and Ballast department, CLB) and LED (LED Lighting Solution lighting solutions, LLS) the difference is very large, it is estimated from LEDinside sources, gross two business is about 720 million euros (about 4 billion 920 million yuan).

LEDinside research associate Chu Yu Chao said: "OSRAM is unlikely to cause partial sale of two lamps, the two lamps for business belong to a sales channel, while the mainland manufacturers can borrow from the lamp business acquisition of OSRAM, the successful expansion of international sales channels. "

The value of this business transaction is much lower than Lumileds, mainly because of the different nature of the sale of OSRAM lighting business and Lumileds. Lumileds first split into separate departments, LED products include LED chip, package and components, also on behalf of the upstream market, there may be many mainland manufacturers are still chasing hard LED patent and to undertake other technical knowledge.

In contrast, the cause of the sale of OSRAM lighting industry is the end product of the whole industry, and in terms of the market, is the mainland manufacturers are rapidly catching up with the u.s.. Intense price war between the mainland manufacturers also let the price of lamps and lanterns in recent years straight down, coupled with LED and other energy-saving lamps such as fluorescent lamps sales. OSRAM's CLB traditional lighting business revenue in fiscal year 2014 decline of only $1 billion 960 million (equivalent to approximately RMB 13 billion 394 million yuan), while before interest before tax depreciation and amortization of net profit (EBITDA) of only $4.6%.

LEDinside research associate Chu Yu Chao pointed out that the future will have more international companies to sell its lighting business is not profitable, and the acquisition should will mostly be mainland manufacturers.

A number of LED vendors have said, have a strong interest in the acquisition of OSRAM lighting business, including wood Linsen and Shanghai audio, actively expressed intention to purchase. It is expected that in the future there will be more mainland manufacturers to express interest, but must be approved by the government in order to actually acquire. At present, the market is generally recognized, all mainland bidders will need to obtain government permission to acquire foreign companies.

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