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Home  > Knowledge  >  Chinese Consortium Including MLS Acquires Osram's LEDVANCE Business for EUR 400M

Chinese Consortium Including MLS Acquires Osram's LEDVANCE Business for EUR 400M

2016-07-27

In its meeting today, the Supervisory Board of OSRAM Licht AG (Osram) approved the sale of the general lighting lamps business. The buyer of the business known as Ledvance is a Chinese consortium consisting of the strategic investor IDG Capital Partners (IDG), the Chinese lighting company MLS and the financial investor Yiwu State-Owned Assets Operation Center (Yiwu). The purchase price amounts to more than EUR 400 million (US $439.58 million).

Osram will additionally receive payments for license agreements of trademark rights. The consortium and Ledvance are a very good fit due to their complementary structure both geographically as well as respective product portfolios and they have solid financial resources. Through the transaction, both would respectively benefit from a significantly larger sales and distribution network, as well as sourcing synergies, which would lay the foundation for co-operative future growth. The transaction is subject to certain closing conditions, regulatory approval by the relevant authorities. The transaction is expected to close in the course of fiscal 2017.

Osram has found a new owner for its lamps business, the Chinese consortium, with IDG as a long-established strategic investor with substantial expertise in operation outside China and experience in industrial technology, and MLS as one of the leading companies in the area of LED-based products for consumers in China. Benefitting from Ledvance’s decades of experience, MLS will be able to significantly expand its position in the global lighting market through the transaction. Ledvance in return will gain improved access to the Chinese growth market as a result of this transaction. Based on an agreement with Osram, Ledvance will continue to use the Osram and Sylvania brand names at the product level. Intellectual property rights are clearly allocated so that the consortium and Ledvance can continue to drive global innovations and product development.

“The transaction is a milestone in Osram’s alignment towards a high-tech player in the lighting industry,” said Olaf Berlien, Chief Executive Officer of OSRAM Licht AG. “We sought and have found the best owner for Ledvance. Within the consortium, MLS is a growth-oriented lighting company with unique expertise and a strong position in the important Chinese market.”

Through the transaction, Ledvance is able to develop a co-operative worldwide footprint with MLS. Ledvance’s products and those of MLS target different users in different territories in emerging and developed markets. “We are looking forward to working together. The qualifications and wealth of experience of the management team and employees of Ledvance represent two key factors for Ledvance’s success in the cooperation with MLS in the future,” said Sun Qinghuan, Chairman of MLS. “Backed by strong financial resources, we are committed to sustainable development and the goal of further strengthening the market position of the cooperative network as one of the leaders in the global lighting market,” adds Antony Yu, Partner at IDG.

“The new ownership strongly supports the Ledvance strategy and will lead to a number of advantages for Ledvance and our customers. We will gain access to a more cost efficient supply chain for LED Lamps and luminaires and can continue to uphold our quality standards. Furthermore, we will strengthen our sales opportunities in Asia and especially in China,” said Jes Munk Hansen, CEO of Ledvance. Jes Munk Hansen and the management team of Ledvance will remain in place following the closing of the transaction.

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