AMS AG offers 4.1 US$ Bn to Acquire OSRAM Licht AG, Trumping Bain Capital, LP and The Carlyle Group
The Austria-based AMS AG, formerly known as austriamicrosystems AG is engaged in designing and manufacturing of advanced sensor solutions. The company offered 3.7 € Bn i.e., 4.1 US$ Bn for the Germany-based OSRAM Licht AG. It is the second effort made by AMS to acquire OSRAM Licht, the embattled German rival in order to trigger a bidding war. Later on Sunday, AMS said that the offer would set each Osram share at 38.5 € i.e., 43.1 US$ and depending on the target’s ability to wave a standstill agreement in the coming few days.
AMS approached OSRAM which was smashed shortly after the Germany-based company went public last month. After experiencing a series of profit warnings and public disputes with Siemens AG, OSRAM became the acquisition target. The spinoff was confirmed and made a bid of 3.4 € Bn. OSRAM board from Bain Capital, LP and The Carlyle Group accepted that AMS has offered higher than 35 € i.e., 39.2 US$ per share. On August 8, the agreement was in jeopardy when the major shareholder Allianz Global Investors rejected by saying that it is too low.
The revenue of OSRAM was affected due to exposure of the company to the automotive industry which accounted for more than half of its revenue. The suppliers and carmakers are struggling to cope up with the transition to electric vehicles as well as decreasing demand in Europe and China. The company investors lost confidence in the management’s ability and Olaf Berlien, the Chief Executive Officer. Since its peak in early 2018, the stock has fallen over half of its value.
According to the statement made by AMS, the company will not touch the collective bargaining agreements of OSRAM for five years. If the takeover attempt is successful, AMS would sell the digital division of OSRAM which makes lighting controls for medical systems and horticultural systems. The Austria-based company also said that its proposed transaction would allocate corporate value to a target of 4.3 € Bn i.e., 4.8 US$ Bn.