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© ams Components | August 12, 2019

ams makes a u-turn - submits an offer for Osram

ams says that it has submitted a fully financed proposal to Osram Licht AG for an all-cash takeover offer for 100% of the share capital of the company at a price of EUR 38.50 per share.

ams says that the transaction ticks all the boxes that the company has for large transactions, namely that it's strategically compelling, value enhancing, financially accretive, achievable with a sustainable capital structure and fits with the company's financial model. The combination of the two companies would create one major player in sensor solutions and photonics with approximately EUR 5 billion of revenue. This accelerates ams to win in new breakthrough optical solutions, expedites the diversification of ams' revenue mix, enhances its manufacturing footprint with clear scale and cost advantages, and leverages the complementary go-to-market strengths of the two companies. The transaction values Osram at an enterprise value of EUR 4.3 billion. The addition of Osram will diversify the revenue composition of ams translating into a more balanced and less volatile earnings and cash flow mix, with 35% revenue exposure to Consumer and 45% to Automotive (pro-forma for the contribution from OSRAM). The combined Automotive business will be a pole position in new high-growth markets such as assisted and autonomous driving, automotive human-machine interface and automotive digital lighting, where revenue growth is driven by market penetration of new features rather than car volume growth. The addition will also enhance ams' manufacturing footprint with scale and cost advantages. “The Proposal is compelling for all stakeholders of OSRAM. Therefore, we trust that OSRAM will waive the standstill agreement and allow its shareholders to benefit from our Offer. This will clear the way for OSRAM and ams to create a winning combination. Together, we can rely on great employees, products and technology to become a global leader in sensor solutions and photonics, delivering tangible value to our customers. We offer a long term plan which we can execute from a position of strength, based on continuous investment and growth,” says Alexander Everke, CEO of ams in a press release. The proposal also comes with comprehensive commitments aimed at safeguarding employees and production facilities of Osram in Germany. ams says that it intends to invest in the Regensburg manufacturing site by consolidating front-end LED production there, thus enabling job creation. ams has requested Osram to waive the standstill agreement so that ams can launch the offer by 15 August 2019 to all stakeholders. The offer would be subject to a 70% minimum acceptance threshold and customary closing conditions, including regulatory clearance. ams expects to complete the Transaction in first half of 2020.
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August 21 2019 3:49 pm V14.1.4-1