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.

Benefiting 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 OSRAM Licht AG chief executive Olaf Berlien.

“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 MLS chairman Sun Qinghuan.

“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 IDG partner Antony Yu.

“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.”

The transaction is focused on growth and will not induce additional personnel measures due to a limited overlap in organisational structures between the involved companies. The agreements and principles safeguarding the future that Osram and the employee representatives agreed upon remain in place. Consequently, works agreements and social plans will not be changed until the end of 2018. The entire collective agreement and dismissal protection for the German workforce are preserved.

Fully guaranteed financing for this transaction is in place. The consortium will finance the purchase price on an all equity-financed basis. After closing of the transaction, the consortium is contractually bound to certain financial restrictions concerning debt, liquidity and dividend payments at Ledvance for a period of three years.

With its three-pillar strategy announced last November, Osram will strive for sustainable growth in technologically sophisticated markets. Based on the company’s extensive product and patent portfolio, excellent global growth opportunities emerge in particular for Osram’s business with opto-semiconductors (LED). This growth will be strengthened with the new production plant in Malaysia. In connection with the transaction, Osram and MLS entered into a strategic supply agreement, by which MLS intends to purchase an annual order of LED chips from the new plant in Kulim, Malaysia, once production has started.