Munich, Vienna Everything is actually ready for the big takeover. In a betting bid with financial investors, the Austrian newcomer AMS had successfully offered more than four billion euros for the much larger, but weaker, traditional company Osram.
The aim of the bold acquisition: under the leadership of the Austrians, to form a European photonics champion that combines expertise in the areas of light, sensors and chips, which are growing ever closer together.
The competition authorities in Brussels want to decide on the takeover by July 6. So far, it looked like easy approval. There is little overlap between the two companies.
But shortly before the expected completion of the billion deal, the climate is poisoned. The Austrian stock exchange regulator is investigating extensive transactions with the AMS share. There are rumors in Vienna that the investigation may have been launched by “frustrated Osram managers”.
AMS is considering legal action, according to the Handelsblatt. Because of the deliberately placed speculation about the investigation, bonds could only be placed on the market at higher interest rates on Monday. That would cost the company and its shareholders twelve million euros. AMS did not want to comment on the events on Wednesday.
Vice President Osram of the Supervisory Board, Klaus Abel from IG Metall, demanded that the share transactions be clarified quickly. The presumption of innocence also applies to the managers of AMS. However, the investigations reinforced “question marks regarding the integrity of the AMS management”, said the employee representative. The difficult relationship between IG Metall in Munich and the AMS headquarters in Premstetten has become even more frosty.
But that’s not all. Some fear that AMS could smash Osram after the takeover in order to partially refinance the proud purchase price. From the beginning, the Austrians were primarily interested in the Osram chips division.
This speculation has now alarmed a group of European parliamentarians. In a letter to Competition Commissioner Margrethe Vestager, they warned that innovative technologies could be sold to companies outside Europe – for example to Asia.
“In light of the virus pandemic, Osram lighting technology is a key industry for Europe. We want to know how the EU Commission wants to ensure that this technology can be kept in Europe, “said the Christian Democrats internal market spokesman in the European Parliament, Andreas Schwab, the Handelsblatt.
He wrote the letter to Vestager together with his two Italian colleagues Alessandra Moretti, a social democrat from Lombardy, and Massimiliano Salini, a conservative from Veneto.
In the letter to Vestager, which is in the Handelsblatt, it says: “We have to ensure that companies with possible innovative technologies like Osram continue to operate in the EU market.” For example, Osram is the only company that uses UV-C technology for offer surface disinfection, which helps in the fight against the corona virus.
Austrians reject fears
MEPs also point out that a major shareholder in AMS is already from Asia. According to the Swiss stock exchange, the Singapore sovereign wealth fund Temasek has now become the largest single shareholder of AMS AG, which is listed in Zurich.
In response to the corona crisis, the EU Commission has set itself the goal of increasingly holding important productions in Europe and preventing emigration to Asia, for example. The trio of MPs calls for this requirement to be closely examined when it comes to approval under competition law. “We have to be very careful to ensure that the EU Commission also applies its own political goals in merger control,” said Schwab.
The fears were rejected in Austrian industrial circles: AMS was just interested in the high technologies from Osram and therefore had no interest in selling promising areas. “The reason why they offered more than four billion euros for Osram is precisely high-tech.”
If AMS later theoretically wanted to sell parts of Osram to Asia, for example, the Foreign Trade Act would apply. Brussels also had a say in this.
The speculation about filleting is no accident. “We are going to look at the portfolio. We assume that not all parts fit the new group, ”AMS boss Alexander Everke admitted in an interview with the Handelsblatt.
The first candidate is Osram’s digital division. It has a promising name. But behind it hides a deficient smorgasbord, which also includes the electronic ballasts. AMS initially had the division at its disposal, but then declared that the future would be examined together with Osram.
Workers fear busting
Industry circles point out that Osram alone should have had to worry about digital – you couldn’t blame the Austrians for all the cuts that might have come anyway. With good growth and profitability, AMS had developed significantly better than Osram in recent years.
But it’s not just about the digital division. Recently there were indications that large parts of the Osram auto sector could also be split off.
The automotive division is Osram’s largest division, which is responsible for around half of the 3.5 billion euros in sales. In an internal presentation, parts of it were hung up separately in a holding structure similar to digital, which some saw as preparation for a sale.
According to Handelsblatt information, this is about traditional car lighting such as xenon and halogen, so only a part of automotive. It is already suffering from the decline in demand in the corona crisis.
A possible smashing was from the outset the great fear of the employee representatives, Vice-Chairman Abel told the Handelsblatt. “This is now confirmed once again.”
AMS rejected the speculation about a sale of the car division. “We can not understand the conclusions in recent press speculations in any way, nor do we see a basis for it,” said the company.
They can’t understand the excitement in the AMS environment anyway. The Austrian group has shown that it always uses the latest technologies and can successfully develop products from them. For example, AMS has become an important Apple supplier.
But it is also acknowledged in Austrian industrial circles that AMS has not always behaved cleverly. The Austrians failed to bring IG Metall, which is powerful in Germany, on board. The union had played a constructive role at Osram in recent years – but supported a possible takeover by financial investors.
The employee representatives may have feared that the new group would be based in Austria.
In addition, AMS has communicated very little in recent months. Some in Munich find the new gentlemen’s actions to be opaque.
Speculation about stock transactions has reinforced this impression in the past few days. The Handelsblatt had reported that the Vienna Financial Market Authority (FMA) was investigating extensive transactions in AMS shares. According to the newspaper “Die Presse”, the investigation was triggered by an anonymous letter.
According to information from the Handelsblatt, the stock exchange regulator is pursuing several investigations in the context of the investigations. On the one hand, it will be checked whether so-called directors dealings, i.e. share transactions by board members and supervisory boards, should have been reported not only in Switzerland, where AMS is listed, but also in Austria.
In addition, other facts would also be examined. AMS emphasized in a message that, according to the FMA, there were no investigations against the company itself. However, the authorities had informed that “there are investigations into possible insider trading against natural or legal persons who can either be connected to AMS or not connected” . So much is still unclear. The alpine drama threatens to continue.
More: Fear of Osram smashing: MEPs raise the alarm