German lighting group Osram announced that it has reached a comprehensive business merger agreement with Austrian semiconductor company AMS and advised its shareholders to accept the current tender offer to settle the long-running merger and acquisition transaction.
According to the merger agreement reached between the two parties, if reached, OSRAM employees will enjoy layoff protection for approximately 3 years and will do their best to protect the existing working environment of all business units. In addition, Ames clearly supports OSRAM's optoelectronic development strategy, and the OSRAM brand will also appear on the new group's company name.
After Osram and Ames reached a merger agreement, the Supervisory Board and the Executive Board recommended to OSRAM shareholders Ames' offer for this acquisition. In the justification statement, the board of directors proposed that a cash quote of 41 euros per share is an appropriate valuation that reflects the value of the company, but shareholders must accept this quote before December 5, 2019.
The "marriage proposal" is full of ups and downs
As we all know, in recent years, the global economy has weakened, and the general lighting and mobile phone markets have continued to decline. OSRAM's inventory in China and other places is high. OSRAM has issued six warnings on profit decline.
Therefore, in February this year, OSRAM decided to sell to the outside world, and disclosed the news of Bain Capital and Carlyle Group's intention of merger and acquisition.
On July 5, Bain Capital and the Carlyle Group formally made a public tender offer to OSRAM for a cash price of 35 euros per share.
But on the tenth day of Bain Capital and Carlyle Group's formal offer to OSRAM, which was July 15, Ames officially announced that it would join the long "Tug of War" and pay 38.5 Euros per share. The price disrupted Bain Capital's and Carlyle Group's original offer of 35 euros per share.
According to the information, the current market value of Ams is about 3 billion euros, and OSRAM is valued at more than 3.2 billion euros. The source of funding for this acquisition is mainly through the temporary 4.2 billion euros bridge loan arrangement and capital increase plan. An important reason why the first negotiation failed.
"When conducting M & A transactions, it is necessary to ensure strategic attractiveness and clear value-added opportunities; however, after evaluating recent developments, Ames believes that there is no sufficient basis to continue acquisition negotiations with OSRAM." In July, Ai Max said in a statement.
Obviously, this matter has not come to an end.
On July 23, Ames announced its decision to re-evaluate a potential acquisition of Osram and to offer a premium of 4.3 billion euros. On August 11, Ames made the proposal to OSRAM, and then formally issued an offer on September 3.
On September 16th, an announcement issued by Osram officially revealed that the balance began to tilt to Ames.
If the story ends here, it may not be a lot of twists and turns.
Immediately after September 25, OSRAM received a new offer from Bain Capital and Carlyle Group, which is 38.5 euros per share, and can provide OSRAM with strategic and growth prospects that are superior to Ames.
It was because of the stimulus from competitors that on October 18, Ames offered another 4.6 billion euros to acquire all OSRAM shares at 41 euros per share. At this point, Bain Capital and Carlyle Group announced that they would abandon the tender offer, but will pay close attention to further development.
Until November 12, Osram's latest announcement confirmed that this merger or acquisition transaction may settle the dust. Of course, this does not exclude vetoes from shareholders.
Unlike the recent Evergrande Group, which is holding hands with many mainstream component suppliers around the world, this operation of Ames, if not unexpected, may become another small and successful model in the history of component companies' mergers and acquisitions.
This wave of "employments" is full of sincerity
Earlier, in the fiscal year ending September, Osram announced that the company's turnover had fallen by 13.1% to 3.5 billion euros, adjusted EBITDA before profit was 307 million euros, and the corresponding profit margin was 8.9%. In this announcement, OSRAM also disclosed some preliminary surplus figures for the fourth quarter. Revenue fell by 5.3% to 924 million euros, and the after-tax loss for the quarter turned to 203 million euros.
And in its view, global automotive production will not recover in the short term. In light of market prospects, OSRAM has depreciated the goodwill of OSRAM Continental Ltd. by 171 million euros in accordance with applicable accounting standards.
In response, OSRAM plans to cut costs by 220 million euros between 2017 and 2021 in order to weather the crisis. According to Osram, in the past fiscal year, its special expenditures reached 131 million euros, which were mainly used for personnel adjustments, M & A-related issues, and measures to further improve efficiency.
Therefore, under the premise of deciding to sell the company, how to maximize the interests of the company and its employees, or the key points of the entire OSRAM merger and acquisition transaction, which may be the main reason for the "heart" of OSRAM management won by Ames
According to data, as early as the second bid of Ames, it was proposed that once the acquisition is successful, Munich will become the global joint headquarters, and the existing company name and brand of OSRAM will remain unchanged. By 2022, OSRAM employees will enjoy Layoff protection. This means that centuries-old Osram can still survive.
For this reason, Osram's CFO Ingo Bank said in an interview with the media that the acquisition agreement by Ams seemed "very sincere".
Whether it is for OSRAM or Ames, in today's global environment, transformation is the most critical thing. The former has stated clearly that it is necessary to transform into a semiconductor-based high-tech optoelectronic company, while the latter stated that its ultimate goal is to become a global leader in the field of sensing and optoelectronics.
Both directions share the same direction.
For the future, the automotive business will be the focus of Amers' development, and its business share will also increase from the current 10% to 35% -40%. If this successful merger and acquisition, Ames has stated that it and OSRAM will have synergies in the company's intelligence, IT and R & D projects, bringing an expected synergy effect of 300 million euros per year, which means annual revenue will reach 5 billion EUR.
As Berlien, CEO of Osram stated, "We have had an eventful year. Next, we will still firmly transform into a high-tech optoelectronics company." The combination of the two strong may form a stronger future.