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Restructuring at Osram will include job cuts - AMS

Restructuring at Osram will include job cuts - AMS
FILE PHOTO: The headquarters of lamp manufacturer Osram is pictured in Munich, Germany, August 13, 2019. REUTERS/Michael Dalder -
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MICHAEL DALDER(Reuters)
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By Kirsti Knolle

VIENNA (Reuters) – AMS’s <AMS.S> finance chief said on Thursday further restructuring would be necessary at Germany’s Osram <OSRn.DE> and signalled there would be job cuts if the sensor specialist’s takeover offer for the company was successful.

The Austrian group is aiming to beat a rival bid from finance investors Bain Capital and Carlyle Group <CG.O> and is waiting for Germany’s finance watchdog Bafin to allow it to submit its offer.

AMS has promised to put forward an offer that values the much bigger lighting group at 4.3 billion euros (£3.9 billion). It plans to focus on Osram’s key technologies for autonomous driving and will align the integration of Osram accordingly, Michael Wachsler-Markowitsch told Reuters.

“Osram has been going through a restructuring programme for years … that is certainly not over yet,” the CFO said, adding that a successful turnaround would not be possible without job cuts. “At the end of the day, there will have to be a reduction in staff.”

However, in Germany, where around 6,500 of Osram’s more than 24,000 employees work, new jobs will be created, he said.

AMS has a track record in acquisitions and does not buy companies on the basis of turnover but because it is interested in technology, the finance chief said in response to investor concerns that Osram was too big for AMS to be able to implement its vision of becoming a global leader in sensors and photonics.

A combined AMS/Osram company has the potential to earn $25-$30 per lidar system – pulsed laser sensors that can measure ranges and distances – for self-driving cars and up to eight such systems are needed per vehicle, Wachsler-Markowitsch said.

“We have concrete projects underway, concrete sales projects, concrete contracts with customers, with whom we can penetrate the market.”

AMS aims for the combined business to reach double-digit revenue growth in the medium-term with an adjusted operating profit margin of more than 25%.

Asked about a reaction from its key customer Apple <APPL.O> and whether any kind of collaboration could be expected, the finance chief said: “Our customers view this transaction exclusively from a technology point-of-view and find it very compelling.”

(Reporting by Kirsti Knolle; Editing by Kirsten Donovan)

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