Chinese investors

Labor union opposes Osram sale

  • Why it matters

    Why it matters

    IG Metall wields power over Osram’s main shareholder Siemens, and its opposition to the deal could make life hard for Osram’s management.

  • Facts

    Facts

    • Siemens holds a 17.5-percent stake in Osram.
    • Employee representatives at Osram clearly support the IG Metall position.
    • Osram’s share price has nearly doubled since its IPO in 2013.
  • Audio

    Audio

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osram-times-deutsches-museum
Osram in the dark about takeover. Source: Deutsches Museum

IG Metall, the influential metalworkers’ union, said it will oppose a complete takeover of the lighting specialist Osram by Chinese investors.

The labor union wields power over Osram’s one-time parent company Siemens, which still holds a 17.5 percent stake in Osram.

Jürgen Wechsler, chairman of the Bavarian branch of IG Metall, told Handelsblatt a deal with Chinese investors could have “possible negative consequences for employees.”

Mr. Wechsler said a potential takeover was about more than shareholder value. It would also have an impact on employees ad on the company itself.

The potential sale of Osram to Chinese investors has sparked a debate in Germany about the dangers of foreign ownership.

The Munich-based company is a technology leader in highly attractive markets. “Osram has an attractive technology portfolio and promising future strategic projects. A takeover carries significant risks of a loss of critical know-how and customers discontinuing important projects,” Mr. Wechsler said.

Mr. Wechsler said Siemens could certainly block the Osram deal by placing its stake on the open market, instead of selling to the Chinese investors.

It is unusual for a union to express its views on a subsidiary so clearly, but the potential sale of Osram to Chinese investors has sparked a debate in Germany about the dangers of foreign ownership, and the rights of employees is one of the questions that has been raised.

Company sources said the employee representatives at Osram, under the leadership of deputy supervisory board chairman Michael Knuth support IG Metall’s position. Labor representatives were even unwilling to rule out legal action in the event of a takeover. Mr. Knuth was unavailable for comment on Sunday.

Osram has had a tetchy relationship with Siemens in the past. Siemens chief executive Joe Kaeser has in the past openly questioned chief executive Olaf Berlien’s strategy. One of the main sticking points in the dispute was Siemens’ feeling that the company’s new strategy involving a major investment in Malaysia was too risky.

While reporting quarterly results last week, Mr. Kaeser said the two men had resolved their differences and noted Osram’s share price had doubled since its initial public offering in 2013, to the most recent price of about €48 ($52

Industry insiders suggest Mr. Kaeser’s warm words towards Osram are linked to IG Metall’s opposition to a takeover. Mr. Kaeser needs IG Metall for his most important project at the moment, the €30 billion IPO of the medical technology division.

 

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He needs to keep dialogue with Osram open, to make sure he can have a say in its final fate.

Mr. Berlien last week confirmed for the first time that there had been communication with prospective Chinese buyers.

Financial sources said the prospective Chinese buyers were on the verge of submitting a takeover bid a few weeks ago, but held back in light of the German government’s intervention over the potential takeover of machine parts Aixtron by another Chinese commpany.

Sources said the potential investors feared that showing their hand at a sensitive moment would hamper the Aixtron takeover and other current bids.

 

Axel Höpner is head of the Handelsblatt office in Munich, focusing on the state of Bavaria’s companies, including Allianz and Siemens. Robert Landgraf is Handelsblatt’s chief correspondent for the financial markets. To contact the authors: landgraf@handelsblatt.com and  hoepner@handelsblatt.com

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