China’s biggest LED parts company LED is jumping into a process of buying OSRAM’s lighting business.
China is the epicenter that led global LED parts markets into ‘Chicken Game’ and if it joins finished lighting product markets, South Korea’s LED ecosystem will receive a direct hit.
According to industries on the 15th, it is recently confirmed that China’s MLS is planning to participate in buying Germany’s lighting business OSRAM.
MLS recently held a meeting for board of director regarding a process of buying OSRAM and decided to entrust rights of this process to CEO (Sun Qing Huan).
Although detailed timing and methods are not revealed yet, it seems that it has entered a process on full-scale after looking at a transfer of full authority.
OSRAM along with Phillips and GE are considered as world’s 3 biggest lighting companies.
Germany’s Siemens divided OSRAM from itself in 2013 as part of reorganization of business structure, and OSRAM is since been pushing to selling part of its general lighting departments so that it can focus on businesses that will bring high-added values just like car lights.
Chinese businesses are showing active interest in buying OSRAM’s brand and distribution network. Before MLS showed its intention to buy OSRAM, other Chinese lighting companies also showed their intentions to buy OSRAM.
If this deal goes through, it will have tremendous amount of effect on South Korea’s industries. Until now China has been leading ‘Chicken Game’ in LED markets.
As Chinese Government was promoting LED industries, which are considered as next-generation source of light, many Chinese businesses entered LED markets that led to creation of oversupply.
Because South Korea’s major companies such as Samsung, LG, Dongbu and others could not withstand aftereffect of China’s Chicken Game, they either had to reduce related businesses or lost a lot of their profitability.
Because a vertical integration from parts to finished products will take form if Chinese businesses also have rights to OSRAM, position of South Korean businesses in global markets will become narrower.
“We are already having difficulties in competing against Chinese companies, but they will become even bigger if Chinese companies get a hold of OSRAM.” said a person from lighting industry. “We are paying extra careful attention to this situation.”
It is heard that OSRAM will divide part of its general lighting businesses until April of next year and plan to sell them.
Businesses that used to show strengths in lighting markets are having ups and downs due to appearance of LED. Phillips divided its lighting business last year and sold Lumileds, which is an affiliate related to LED parts and car lights, to a private equity fund in April of this year.
Staff Reporter Yun, Kunil | [email protected]
