China-based lighting company MLS Co., Ltd. announced Wednesday its purchase of Osram Licht AG's recently-rebranded lamps division, LEDVANCE.
Back in January, Osram officially began the spin-off of its lamps business, and earlier this month the German company was officially operating its lamps business as LEDVance.
Osram's lamps business was making up 36 percent –– over $2 billion –– of the company's annual sales. The sale came for an estimated $439 million and was bought by a consortium including MLS and two other Chinese companies –– IDG Capital Partners and Yiwu State-Owned Assets, both of which were financial players in the deal.
For Osram, the sale points to a growing emphasis on products for the automotive industry, big lighting system solutions for buildings and cities, and research and development.
In May, Philips Lighting was carved away from Royal Philips NV and sold 25 percent of its business on the Dutch stock market for $850 million after being unable to find a private buyer.
According to a statement released by Osram, LEDVance's 8,800 employees were safeguarded by the move. "Work agreements and social plans" cannot be changed by MLS until the end of 2018.
“The transaction is a milestone in Osram’s alignment towards a high-tech player in the lighting industry,” said Olaf Berlien, Chief Executive Officer of OSRAM Licht AG. “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.”
MLS was established in China in 1997 and, according to a page on Forest Lighting's website, has become one of the "top 10 LED manufacturers in the world" with a reported revenue of over $1 billion in the LED space. Forest is a U.S.-based subsidiary of MLS.
A LEDVance statement released Wednesday teases future growth and innovation through this partnership. Furthermore, the statement hints at the expansion of LEDVance's North American product portfolio vis a vis access to MLS product lines. One enhancement, in particular, that LEDVance mentions as an example of this expansion is LED filament technology –– a nook of the LED space that MLS recently sought to occupy with the purchase of Hong Kong-based Super Trend Lighting.
“The new ownership strongly supports the LEDvance strategy and will lead to a number of advantages for LEDvance and our customers," said Jes Munk Hansen, CEO of LEDvance.
"We will gain access to a more cost efficient supply chain for LED Lamps and luminaires and can continue to uphold our quality standards. Furthermore, we will strengthen our sales opportunities in Asia and especially in China.”
LEDVance officials are likely to release more information regarding the sale in the coming weeks. We will relay anything pertinent to you here on the Lighting Insights Blog.