Turnaround at Osram: The management of the Munich-based lighting technology group is no longer reluctant to take over the Austrian chip and sensor manufacturer AMS. Following promises by the Austrians, the Executive and Supervisory Boards are now recommending that shareholders accept the € 4.6 billion tender offer. The offered 41 euros per share are appropriate. The offer runs until 5 December – AMS already holds just under 20 percent of Osram.
"Most importantly, the employees at German locations are protected from merger-related dismissals by the end of 2022," said CEO Olaf Berlien. He had already sent positive signals to AMS last week. The former Siemens personnel manager Brigitte Ederer should ensure that the agreements are adhered to.
The employee representatives, however, stick to the resistance against AMS. The decision in the supervisory board fell with seven to five votes, only one executive joined the capital side. In a special vote on the takeover bid, the works councils and trade unionists in the supervisory board describe the actions of AMS as "unlawful".
Gap in the law
The Group Works Council has even filed a complaint against BaFin's approval of the Takeover Offer by BaFin because AMS used a loophole in the law to circumvent a twelve-month vesting period before a new start. Whether the works council may sue at all, but is unclear.
The improvements compared to the first offer are "minor" from the workers' point of view, according to the special vote. The waiver of redundancies is worthless, there is no security for the workforce. In the past financial year 2018/19, Osram has already cut its workforce by 2700 to 23 500 jobs.
Further deletions should follow, as the traditional company announced. "Due to the economic development and the ongoing technology change, further structural adjustments are necessary and discussions are currently underway with the committees." The austerity measures with the personnel are to cost around 60 million euro. The Handelsblatt had reported that Osram wanted to cut a higher three-digit number of jobs.
The company is in crisis. In 2018/19 Osram slipped with 343 million euros in the red, among other things, due to a write-off of 171 million euros on the goodwill of the auto parts joint venture with Continental. A year earlier, a profit of 188 million euros was recorded. The dividend will be canceled. Sales fell 13 percent to 3.5 billion euros, while adjusted return on sales dropped to 8.9 percent from 16.4 percent.