Siemens pulls the plug on Osram

Siemens’s complete withdrawal from the lighting industry further scales back the once sprawling German conglomerate, as CEO Joe Kaeser offloads assets from trains to medical scanners to household equipment in rapid succession.

The Munich-based company completed the sale of its remaining 17% stake in light manufacturer Osram Licht, raising about €1.2bn and exiting a business in which it was involved for the better part of a century.

Siemens sold 18.1-million shares that were offered to institutional investors, the company said after the markets closed on Wednesday. The stock sold at €65.05 apiece and did not get enough demand from investors for all the shares, according to people familiar with the matter who asked not to be identified because the information was not public. Osram shares fell the most in more than a year.

For Kaeser, the move came after Osram’s value more than doubled since an initial public offering in 2013, and a week after he unveiled a proposed combination of Siemens’s train business with that of Alstom of France. Siemens has also withdrawn from businesses making phones, hearing aids and ovens.

For Osram, the severance of ties comes after its own strategic shift into high technology as energy-saving light-emitting diodes, or LEDs, eclipse classic light bulbs.

Osram shares fell as much as 5.1%, the most since July 27 2016, and were trading down 3.9% at €64.47 at 11.54am in Frankfurt. That trimmed gains to 29% so far in 2017 and gave a price that was more than double the July 2013 initial public offering of €24. Siemens fell 1.2% to €119.50.

Siemens said it would retain a small number of Osram shares required to service a bond plus warrant issue due in 2019.

THE MOVE CAME AFTER OSRAM’S VALUE MORE THAN DOUBLED SINCE AN INITIAL PUBLIC OFFERING IN 2013

“This has been a successful investment” for Siemens, Morgan Stanley analyst Ben Uglow said in a note, adding that he remained cautious on Osram.

The stake sale “removes speculation around a strategic investor buying the Osram stake and potentially bidding for the whole company”.

Chinese lighting maker Sanan Optoelectronics said in October 2016 it had held talks with Osram about a possible acquisition. However, Osram had subsequently poured cold water on the possibility that it would be acquired by Chinese investors.