Munich The distrust between that OsramGroup and the future Austrian owner AMS is growing. Above all, the suggestion by AMS CFO Michael Wachsler-Markowitsch that he wants to divest Osram’s digital division is causing criticism in Munich: “We will not leave this alone and address this in the company’s corporate bodies,” said Osram’s supervisory board -Vize Klaus Abel the Handelsblatt.
AMS had violated the agreement to jointly review the portfolio open to results. “That does not create trust between the two companies.” The employee representatives from IG Metall now want to involve, among other things, the monitor Brigitte Ederer, who should mediate in the event of a conflict.
AMS is about to take over the significantly larger Osram Group. The sensor specialist already owns almost 20 percent of the shares and has secured a further 40 percent with a takeover offer. Since the acquisition is not expected to fail due to cartel concerns, the takeover should be completed in the next few months.
The Osram leadership initially resisted the takeover. But after the conclusion of an investor agreement, Osram boss Olaf Berlien switched to cooperation. But the dispute over the portfolio now shows how great the distrust in Munich is still that the Austrians could not keep their promises.
In the beginning, AMS had declared that it wanted to part or all of the Osram digital division. The latest offer document then said that they were ready to “review and evaluate” these plans together with Osram. In Munich it was emphasized that this means an open-ended examination.
Deficit digital division
The digital division is a deficient smorgasbord. A large part is in the traditional business with electronic ballasts for luminaires – these activities would also be available for an independent Osram. The portfolio also includes, for example, the US company Fluence, which sees itself as the world’s leading provider of intelligent plant lighting. This is used, for example, in the cultivation of vegetables or in the USA for the cultivation of cannabis for medical purposes.
AMS now anticipated the joint review. “Osram’s digital business doesn’t really fit with AMS, we’re looking for a better home for it,” said Wachsler-Markowitsch. Such an announcement, even before the takeover is even completed, was seen by some in Munich as an affront. Osram boss Berlien diplomatically described Wachsler-Markowitsch’s statement as “individual opinion”.
Vice-chairman Abel believes that the Austrians have always intended to separate from the digital division: “And this is still their plan.” Once the domination and profit transfer agreement has been decided, AMS can be expected to implement this plan – yes because the heavily indebted corporation needs the money. IG Metall will also approach the AMS leadership, its supervisory board and monitor Ederer and “require compliance and implementation of the assurances given”.
Osram boss campaigns for merger despite differences
Osram CEO Berlien promoted the merger at the Annual General Meeting a few days ago despite the dissonance. The lighting specialist has seldom been truly independent in its more than 100-year history. At times the company belonged to AEG, General Electric and Siemens, The Osram brand will also be retained, said Berlien. “The factories in Germany have a location guarantee.” The merger with AMS offers Osram “a real perspective, a long-term future”.
But the statements of Wachsler-Markowitsch have caused distrust to grow among some at Osram. Officially, it was said on Monday that “there is great confidence that all parties will adhere to the jointly negotiated investor agreement”. The company did not want to comment on a report by “Manager Magazin”, according to which Osram CFO Ingo Bank could become CFO of AMS.
At the Annual General Meeting, Berlien emphasized that the industrial logic behind the merger was correct. Both companies could reduce their dependence on individual markets – Osram on the automotive business, AMS on the mobile communications market. Because both companies are currently facing challenges: Osram is suffering from the weakness of the global automotive markets. The Austrians, on the other hand, are strong on the major customers Apple dependent – and that has to struggle in China because of the corona virus.
Together, you could offer completely new products, said Berlien: “AMS is expanding Osram’s strong LED expertise with its expertise in the areas of sensors, software and system design.” However, it will be crucial whether the integration succeeds. “A merger of this size is a mammoth task.” The dispute over the portfolio shows how difficult the path will be.
More: Osram tightened its austerity measures before the takeover by AMS.