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Siemens Severs Connections with Osram after $1.4 Billion Stake Sale

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German engineering conglomerate Siemens said on Wednesday it sold its share of more than 17% in Osram, the noted lighting giant that was originally a part of it, in an accelerated bookbuild run by Citigroup and Deutsche Bank.

The sale was worth around EUR 1.2 billion (USD 1.4 billion), with a final placement price of EUR 65.05 per share, according to Reuters. Siemens reportedly sold its share of Osram to institutional investors, sources said. The share sold is worth approximately 18.16 million Osram common stocks.

 

Siemens explained it will use the net proceeds from the sale for general corporate purposes.Siemens also made an announcement that it will retain a small number of Osram stock which it needs to service a related bond plus warrant issue due in 2019, as Fox Business carried in its report.

The Siemens spokesman expressed that for the pursuit of the company’s Vision 2020 Strategy Siemens decided to sell the share that is considered ‘a non-core business.’ After 2013, when Joe Kaeser took the leadership to become the CEO of Siemens, the company has been following the Vision 2020 Strategy to narrow its focus down to specific engineering fields including electrification, automation, and digitization. That’s also when it span off Osram and made it an officially listed company on the stock market.

 

Osram, on the other, as one of the most well-known lighting companies, has recently been aiming at the development of advanced automotive lighting, smart lighting, and laser diodes intended for sensors to be embedded in autonomous driving system. 

In july, it reportedly partnered with automotive manufacturing company Continental to establish a joint venture scheduled to operate in early 2018 and invested in LiDAR expert LeddarTech for sensor module research. Following that, it acquired IoT specialist Digital Lumens to develop solutions to integrate with its lighting products in August. 

 

It is reported by Bloomberg that a Morgan Stanley analyst regarded the sale as a successful investment as it “removes speculation around strategic investor buying the Osram stake and potentially bidding for the whole company.” 

The strategic investor possibly refers to Continental and the potential bid might be the rumor that San’an Optoelectronics, together with GSR Go Scale Capital, showed interest to bid for Osram but called it a quit due to German policies against Chinese acquisitions last December.

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