Reviewing Cross-Border M&A Deals in the LED Industry Over the Past Two Years
A cross-border M&A news on October 6 suddenly livened up the lighting industry, which had been in a quiet holiday period. Sanan Optoelectronics plans to acquire the German lighting company Osram and intends to submit a takeover bid before mid-October. Reports indicate that Sanan Optoelectronics may offer approximately 70 euros per Osram share. In the event of a full takeover, Osram would be valued at around 7.2 billion euros.
The news has attracted attention from all sides upon its release. As the revenue of Sanan Optoelectronics, a listed company, is insufficient to "swallow" such a giant as Osram, industry insiders speculate that Chinese government funds may be backing the deal. Meanwhile, as a German lighting giant, Osram holds core lighting and optoelectronic technologies, and this acquisition may face restrictions from the German government. The German Minister of Economics stated that, if the news proves true, the German government will oppose this acquisition. Sanan Optoelectronics has not yet responded directly to this news. Whether this "marriage" will repeat the fate of the early-year terminated "GSR Ventures-Philips Lumileds merger" remains to be revealed by further news.
With the slowdown of European and American economies and the growing strength of Chinese capital, cross-border acquisitions by Chinese capital in the LED industry have occurred frequently over the past two years. Seizing this opportunity to obtain core technologies and patents from foreign LED companies aims to lock the leading role in LED industry development in mainland China. The editor has compiled these billion-level cross-border acquisitions by Chinese capital (including terminated and proposed cases) to review the changes in the market landscape of the LED industry over the past two years.
777 million euros! Siemens plans to sell Osram stake, GSR Capital may take over
Siemens plans to sell its 17% stake in Osram, valued at 777 million euros. According to Bloomberg, potential buyers include the Chinese consortium GO Scale Capital (an independent fund jointly initiated by GSR Ventures and Oak Investment Partners), and the stake has also attracted other Chinese bidders such as P-E Company.
According to reports, Siemens' exit from Osram is due to CEO Joe Kaeser publicly questioning the company's decision to invest heavily in building a factory in Malaysia, and complaining that Osram CEO Olaf Berlien has undermined shareholder value.
$439 million! MLS finally "marries" Osram's lighting business
On the morning of July 27, 2016, MLS announced that Osram, the global LED giant, formally agreed on the 26th to sell its newly independent lighting business company—LEDVANCE, and accepted a purchase price of over 400 million euros (approximately $439 million).
On November 6, 2015, Mulinsen announced that it would participate in bidding for part of OSRAM's lighting business assets. Nine months later, the acquisition result was finally released on July 26.
Mulinsen stated that the entity making this acquisition is Hexie Mingxin (Yiwu) Optoelectronic Technology Co., Ltd. (hereinafter referred to as "Mingxin Optoelectronics"), a subsidiary of Hexie Mingxin Limited Partnership (hereinafter referred to as "LP"). LP is composed of IDG Capital, Mulinsen, and the Yiwu State-owned Asset Management Center. Mulinsen has subscribed RMB 1.25 billion to Hexie Mingxin, holding a 35.7142% stake.
USD 2.75 Billion! Chinese Enterprise Acquires Dutch NXP Semiconductors Business Unit
On June 16, 2016, according to a Reuters report, Dutch chipmaker NXP Semiconductors has just reached an asset sale agreement with Beijing Jianguang Asset Management Co., Ltd. The chip company agreed to sell its Standard Products division for USD 2.75 billion to Chinese state-owned investment company Jianguang Asset and private equity firm Wise Road Capital. Jianguang Asset was jointly established by the large Tianjin-based state-owned fund Zhongjian Investment Capital and the China Science and Technology Financial Industry Alliance, bearing the hallmark of Chinese state-owned capital.
Just over six months ago, NXP had just sold its RF Power division to Jianguang Asset for USD 1.8 billion, and that deal also paved the way for NXP's acquisition of Freescale Semiconductor.
Standard Products has approximately 11,000 employees and is currently headed by Frans Scheper. It is reported that this business unit mainly produces discrete components, logic and power transistors (Power MOS), which are primarily applied in fields such as automotive, industrial, computing, consumer electronics, and wearable devices. Its 2015 revenue was USD 1.2 billion, accounting for approximately 20.8% of NXP's total annual revenue. Upon completion of the acquisition, this division will become a new company named Nexperia, headquartered in Nijmegen, the Netherlands.
USD 752 million! Is MOCVD giant Aixtron about to be sold to a Fujian investment fund?!
China's Fujian Grand Chip Investment Fund LP (FGC) and German semiconductor equipment manufacturer Aixtron (AIXGn.DE) announced on May 23, 2016 that FGC will acquire Aixtron at a price of 6 euros per share, valuing Aixtron at approximately 670 million euros (USD 752 million), including net cash.
Compared with Aixtron's three-month volume-weighted average stock price, this acquisition price represents a premium of approximately 51%. The news of the deal pushed Aixtron's share price up by 20% in pre-market trading at broker Lang & Schwarz. FGC will provide approximately 1.7 billion RMB (USD 260 million) or approximately 231 million euros in equity financing, with the remainder of the acquisition funds coming from debt financing.
Germany's AIXTRON SE is a globally leading provider of deposition equipment for the semiconductor industry, with a business covering multiple fields including compound semiconductors, silicon semiconductors, organic semiconductors, and nanotechnology. Aixtron stated that the company's headquarters will remain in Herzogenrath, Germany, and it will maintain its three major technology centers at the German headquarters, in Cambridge, UK, and in Sunnyvale, California, USA.
1 Billion Yuan! Feile Acoustics Incorporates World-renowned Lighting Giant with Huge Cash Deal
On December 11, 2015, Feile Acoustics announced its plan to incorporate Havells Sylvania through a cash acquisition. It is worth noting that Havells Sylvania is a globally leading lighting technology company with over 100 years of history. This acquisition marks the company's accelerating global expansion in the lighting market.
According to the Feile Acoustics report, the company plans to acquire 80% of the integrated shares of Havells Malta for an estimated EUR 138.4 million in cash through the UK SPV, a special purpose vehicle established in the UK by its wholly-owned subsidiary Feile Investment. At the same time, through Feile Investment, it also plans to acquire 80% of Exim for an estimated EUR 10.4 million in cash. The total consideration for this purchase is expected to be EUR 148.8 million (equivalent to approximately RMB 1.05 billion).
It is understood that the integration of Havells Malta involves a series of operations including asset divestiture to ultimately hold all the assets and businesses of the original Havells Sylvania. Founded in 1901, Havells Sylvania is a globally leading lighting technology company with over 100 years of history. Its sales network spans 48 countries worldwide, with 500 sales and marketing personnel and more than 6,000 dealers. Exim, another target company in this transaction, is mainly responsible for providing procurement and working capital support to Havells Sylvania. Exim's main business is to provide procurement services to Havells Sylvania and sell to its affiliated enterprises at a markup of 1.6%.
2 Billion Yuan! Leyard Plans Nearly 2 Billion Private Placement to Acquire PLANAR Corporation
On the evening of October 23, 2015, Leyard announced that it plans to issue no more than 120 million shares through a non-public offering, with total proceeds not exceeding RMB 1.98 billion, of which RMB 1 billion is intended for the acquisition of 100% equity in PLANAR Corporation.
PLANAR Corporation is a supplier of full-category display product solutions, including DLP rear projection, tiled LCD, and LED displays, as well as high-end home theater solutions. It enjoys a high reputation and significant market share in the international market, particularly in North America. By acquiring PLANAR Corporation, the company will, on one hand, achieve full product coverage under mainstream display technologies in the professional electronic display industry, with its product application areas extending from traditional industrial and commercial sectors to consumer sectors such as high-end home theaters; on the other hand, it will rapidly establish a global operating platform, as PLANAR Corporation's global marketing network and brand influence will greatly promote the realization of the company's global corporate strategic objectives.
$130 million! CEC jointly acquires 100% equity of Bridgelux
On July 21, 2015, Bridgelux announced that it has reached a definitive acquisition agreement with an investment group led by China Electronics Information Industry Group (CEC) and Chongqing Linkong Investment Company. Upon completion of the acquisition, Bridgelux will continue to operate as an independent company, reporting to CEC through its U.S. subsidiary. Additionally, Bridgelux will spin off its smart lighting business as a new independent company, Xenio. Bridgelux and Xenio will be led by Bridgelux's current management team. Xenio will focus on the design and manufacture of LED modules, developing opportunities in the US$135 billion smart lighting market within the Internet of Things (IoT) industry.
On the other hand, according to the announcement issued by the board of Kaifa Technology on July 22, its controlling subsidiary Kaifa Jing Holdings' subsidiary Chongqing Puhuarui Optoelectronics Co., Ltd. acquired 100% equity of Bridgelux for US$130 million.
$3.3 Billion! GSR Ventures Leads Acquisition of Philips Lumileds
On March 31, 2015, led by GSR GO Scale Capital (a fund jointly formed by GSR Ventures and Oaktree Capital Partners), and with the strong support of Chinese and foreign financial groups including Asia Pacific Resources Development Investment Co., Ltd. and Nanchang Industrial Holdings Group Co., Ltd., the acquisition fund announced the successful acquisition of 80.1% of the shares of Lumileds from Philips. Philips will retain the remaining 19.9% of the shares. Philips Lumileds currently comprises the LED and Automotive Lighting Business. The transaction is valued at approximately US$3.3 billion.
What was meant to be a "fairy tale" Chinese cross-border acquisition came to an end with news on January 22, 2016. Philips stated that, citing U.S. regulatory considerations, it had terminated its previously planned sale of its lighting components and automotive lighting divisions to Chinese investors.
Last October, Philips had revealed that the U.S. Committee on Foreign Investment (CFIUS) had expressed concerns about certain unforeseeable consequences of the proposed transaction between Royal Philips and Go Scale Capital, and therefore had suspended clearance of the deal. Outside speculation suggested that, since some of Lumileds' LEDs are used in the defense sector, national security issues were involved.
Recently, the latest news has revealed that Philips is currently negotiating with U.S.-based Apollo Global Management over the sale of its LUMILEDS business assets.