AMS makes bid for Osram at $4.8B valuation to create auto sensor giant
AMS has entered a bidding war for optical technology maker Osram Opto with a cash offer valuing the company at €4.3 billion ($4.8 billion) to create a global leader in sensors and photonics, after Bain Capital and Carlyle submitted a bid valuing Osram at €4 billion, Reuters reports.
The bid by Bain and Carlyle was recommended by Osram’s board of directors, but the company’s largest shareholder said it was too low. Osram is a leader in lighting technology for the auto market, but profit warnings, doubts about its strategy, and a soft car market have weighed on its share price, according to the Post.
The offer from AMS is subject to Osram waiving a standstill agreement.
AMS supplies sensors for facial recognition technology to Apple, but has been working to diversify its portfolio to include more technology for self-driving cars to reduce its dependence on Apple and smartphones in general. The forthcoming generation of iPhones are expected to include both FaceID and in-display TouchID.
Optical sensor makers are expected by many to see an increase in demand for their products as facial recognition is more widely deployed, however.
“The transaction is strategically compelling as it creates the global leader in sensor solutions and photonics for consumer as well as automotive, industrial and medical applications,” AMS Chief Executive Alexander Everke told a conference call. “Together we will command the broadest portfolio of optical sensing and photonics in the industry.”
Osram shares rose to €34.77 in early Monday trading, below AMS’ €38.50 offer and Bain and Carlyle’s €35 offer.
Analysts said a deal between AMS and Osram would raise AMS’ risk profile and depend on synergies, and that it would need to divest Osram’s non-semiconductor business to make sense. AMS has said that it considers Osram’s digital division as not being part of its core. Should a deal be reached, AMS plans to increase the share of revenue from its automotive business from 10 percent to 35 to 40 percent.