Siemens confirms plan to list Osram via spinoff

Nov. 30, 2012
After shelving its plans for an IPO of Osram, its lighting subsidiary, Siemens has confirmed that it will conduct a spinoff of 80.5% of Osram’s shares.
Siemens AG, the industrial conglomerate that owns lighting manufacturer Osram, has confirmed its plans to see its subsidiary listed as a separate company, subject to a shareholder vote.

A plan to conduct an initial public offering (IPO) of Osram shares was finally shelved in July of this year (see below). Instead, Siemens will take a different route, and will spin off 80.5% of Osram’s shares to existing Siemens shareholders.

The transaction will result in Siemens’ shareholders receiving one Osram share for every ten Siemens shares.

However, Siemens still intends to retain a minority stake in Osram, in which it wants to remain “a long-term anchor shareholder.” To this end, Siemens AG will retain a 17% stake in Osram following the spinoff, with the Siemens Pension Trust holding the remaining 2.5%.

An article on the Fox Business website, which predicted the spinoff, said that the stake retained by Siemens is “below the amount that allows veto power but enough to ensure a stable minority at shareholder meetings.” Also, remaining below the 20% level gives Siemens the advantage that it will no longer have to include Osram in its financial reporting.

Implementation of the spinoff plans will require the approval of at least three-quarters of existing shareholders. The decision will be made at the Annual Shareholders’ Meeting on January 23, 2013.

IPO plans

The Osram IPO was first announced in March 2011, and scheduled for fall 2011. But, as we reported in August 2011, Siemens delayed its Osram IPO plan due to adverse market conditions.

Although an IPO remained a possibility through the early part of 2012, the plan was subsequently shelved. In July 2012, Siemens stated that it “no longer considers it highly probable to complete the original plan to dispose of Osram via an IPO by the end of calendar 2012.”

Spinning off Osram will make the public listing “more independent of capital market conditions,” said Siemens, adding: “These moves will provide Osram with the independence it needs as well as more flexible financing options.”

At Strategies in Light Europe 2012, Osram’s Christian Schraft said that the company’s revenue for fiscal 2011 (ended September 30, 2011) was around EUR 5 billion, of which around 25% was from solid-state lighting.

Osram is one of the most highly vertically integrated companies in the lighting industry. Its products range from LED chips and packaged components manufactured by its Osram Opto Semiconductors subsidiary, all the way through to fixtures, systems and intelligent systems supplied by other companies recently acquired by Osram, such as Traxon and Siteco.