Siemens seeks Osram listing as CEO Loescher builds clout

Written by Bloomberg | Updated: Mar 30 2011, 06:47am hrs
Siemens CEO Peter Loescher only needed two hours to clinch one of the most sweeping revamps in the engineering companys 164-year history.

Siemens announced plans on Monday to sell shares in its Osram lighting unit later this year, slicing off of a business with annual sales of 4.68 billion euros ($6.59 billion) in 2010 and almost 40,000 employees. The Munich-based company said it will also create a fourth division that focuses on infrastructure and cities, bundling products such as trains, airport services, power grids and building technologies.

Giving up control of the 105-year-old Osram underscores Loeschers clout to see through extensive changes at the engineering company, as he seeks to narrow the focus on energy, health care, infrastructure and industry tools. The plan to sell Osram, approved by the supervisory board on Monday at a two-hour gathering, follows a sale of a computer-services business earlier this year, a unit that had racked up years of losses.

It makes lots of sense and will highlight why Siemens is one of the best organised and broadest infrastructure suppliers in the world to help developing economies modernize their countries, said Nicholas Heymann, an analyst with Sterne Agee & Leach in New York.

Osram has an enterprise value of 5 billion euros to 7 billion euros, according to a range of analyst predictions. An IPO stands to be one of the biggest listings in Germany in a decade, when the countrys average IPO had an average value of 119.5 million euros, according to data compiled by Bloomberg. Siemens will retain a minority stake, it said.

The revamp contrasts with Loeschers assurance four months ago that more than a dozen years of restructuring had come to an end and that Siemens would now be a normal company with higher profitability and predictable dividend payouts.