Insight Bite: Apple Supplier AMS Teases Osram Takeover

The economic slowdown has hit German lighting firm Osram hard, and difficulties in all three business sectors – automotive, optical semiconductors, and digital systems – are hurting profits.

In response to the downturn, the firm has undergone significant restructuring, and earlier this year accepted a public takeover offer funded by two US private equity firms; Bain Capital and Carlyle, who together bid $3.8 billion.

But before the deal could be finalised, Apple supplier AMS stepped in, briefly offering $4.2 billion for Osram before withdrawing after an evaluation found there was “not sufficient basis” for takeover discussions to be continued.

“AMS confirms that it has been engaged in discussions with Osram Licht AG regarding a potential transaction as AMS is constantly evaluating potential opportunities in light of its technology-led strategy,” said the company in a statement. “AMS requires opportunities to be strategically compelling and demonstrably value enhancing in order to consider pursuing a M&A transaction. However, following an evaluation of recent developments AMS does not see a sufficient basis for continuing these discussions”

Since issuing the statement, AMS has again reverted and expressed renewed interest in Osram.

But regardless of whether or not the deal comes through, the brief flirtation has served to bring attention to broader industry trends that are leading sensor companies like AMS – with markets in smartphones, automotive, health equipment, and machine vision – to take an interest in manufacturers of larger lighting components like Osram.

As the lighting industry gets smarter and more connected, companies like Osram are increasingly moving towards the digital, and teaming up with more IT-focused firms like AMS to chase sensor applications in new technologies like autonomous vehicles, IoT, and virtual reality.

This trend is manifesting not just in acquisitions, but in strategic alliances, like the partnering of networking hardware firm CISCO with Dutch lighting specialist Signify in 2015, and the more recent alliance of IoT networking company Wirepas with LED lighting vendor Fagerhult under Swedish firm Securitas earlier this year.

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