16 months later, unable to get the price it wanted, or to conduct an IPO, the company plans to spin off the unit to shareholders.
On its recent conference call, Siemens CEO Peter Loscher announced the plans:
As for OSRAM, we stick to our original plans to deconsolidate the asset but changed our primary plans. Since market conditions continued to be highly volatile for an IPO, we decided to pursue a spin-off to our shareholders as the most probable part of divestiture. This option requires shareholder approval at the next AGM in January 2013, and Siemens still intends to remain an anchor shareholder in OSRAM. Though our strategic intent remains the same from an accounting perspective, this results in a significantly negative noncash P&L effect in discontinued operations through a so-called cumulative catch-up of depreciation and amortization related to OSRAM.
The company has not yet broken out performance on the Osram unit, so it is difficult to predict what the spinoff will look like, and it raises questions as to whether poor performance at the division forced this decision. Osram has had a strong position in LED lighting, which could generate some growth as the transition to LED continues.
Disclosure: The author holds no position in any stock mentioned.
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