OSRAM LEDvance sale case will be approved by the German government 2Q17

According to foreign media Drive Vision News reported that the German lighting giant OSRAM (OSRAM) will be the general lighting business LEDVANCE IDG to sell capital investment consortium led by Chinese seems to be a has made new progress, or will soon get the approval of the German government.

In late October 2016, the German government for security reasons to revoke a few days China approved the acquisition of Ace enterprise strong decision, the German Ministry of economic affairs suddenly stopped the acquisition of LEDVANCE IDG, composed of Chinese Linsen consortium.

In July 2016, 400 million euros to acquire LEDVANCE Chinese consortium intends to IDG capital, Chinese lighting and financing unit of Yiwu Dachang M.L.S. state-owned asset management center. After the completion of the transaction, Yiwu state owned assets operation center, Linsen will hold 36% stake in LEDVANCE, IDG will have 28%LEDVANCE equity capital.

In accordance with the terms of the acquisition, our priority Malaysia LED chip factory LED from the new Osram chip, in addition, OSRAM will receive a trademark license agreement for additional payment. Based on the Ledvance protocol, the product will continue to follow the Osram and Sylvania of the brand name, but the relevant technology and other intellectual property norms have a clear standard, Ledvance can continue on the basis of product development, but OSRAM is only authorized to use and not sell patent.

First, due to concerns about the technology outflow to the German government to intervene in MLS. However, due to the acquisition of transactions involving LEDVANCE's global marketing assets, such as LED bulb distribution network, and does not involve sensitive technologies, the German government is expected to approve the transaction.

According to reports from the MLS and OSRAM message confirmed that the German government will approve the deal in the second quarter of 2017.

IDG's acquisition of Ledvance is expected to usher in a positive result in 2017, while Aixtron and other German technology companies are not so lucky. The industry is also well aware that the German government's control over foreign investment will be more stringent.

Legal experts said the current Lexology, cross industry review for direct or indirect acquisition of the German company in 25% or more of the shares of non EU residents or non foreign investors in the European Free Trade Association members is mandatory. If Germany decides to ban a deal, it needs to be approved by all federal ministers in the cabinet.

Lexology estimates that the legal basis for Germany's foreign investment review process will become more stringent, which may have a negative impact on M & a transactions. Lexology suggests that foreign investors interested in German companies are aware of these changes in the early stages of the merger negotiations and gain more insight into the new impact of Germany's foreign investment review process. In the near future, customs clearance is expected to become more cumbersome, investors need to be more ready to complete. (compile: LEDinside Nicole)

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