Germany’s Osram has agreed to sell Ledvance, a general lighting lamps business it has carved out, to a Chinese consortium for more than 400 million euros ($439 million).
Osram said on Tuesday it will also receive unspecified payments for license agreements of trademark rights and that the buying consortium, comprising strategic investor IDG Capital Partners, Chinese lighting company MLS Co Ltd and financial investor Yiwu State-Owned Assets Operation Center, will finance the purchase with equity.
Osram said in a statement that deals with workers were safeguarded, with no change to works agreements or social plans until the end of 2018. “The entire collective agreement and dismissal protection for the German workforce are preserved.”
While the traditional light bulb business is expected to decline as more energy efficient technologies like light-emitting diodes (LEDs) emerge, the business is interesting for Chinese buyers who want brand and distribution channels in Europe and the United States.
In the 2015 fiscal year general lighting amounted to around 40 percent of Osram turnover, or approximately 2 billion euros.
Osram said that Ledvance, which had about 8,800 employees as of July 1, would continue to use the Osram and Sylvania brand names and intellectual property rights were clearly allocated.
The German company, which is due to publish quarterly financial results on Wednesday, said it expected to close the deal in the course of its fiscal 2016/17 year.