Philips sells lighting business for $3.3 billion to become the largest capital acquisition transaction for LED

Recently, the fund “Go Scale Capital”, a joint venture between Jinshajiang Venture Capital and Oak Investment, announced the acquisition of 80.1% of Philips’ main LED and automotive lighting business, Lumileds. After completing the transaction in the third quarter of this year, Philips The remaining 19.9% ​​of the shares will continue to be retained. The transaction was valued at approximately $3.3 billion and became the largest fund acquisition transaction in the history of LED.

“After more than six months of fierce competition, we seized the opportunity that we have not seen in the past 100 years.” Wu Shenjun, chairman of the board of directors and managing director of Jinshajiang Venture Capital, told the 21st Century Business Herald.

Philips' Lumileds is a world-renowned lighting manufacturer with world-leading technology in LED chips, LED handset flashlights and automotive lighting. BMW, Volkswagen, Audi, etc. are all customers, and its business covers more than 30 countries around the world, with more than 8,300 employees. In 2014, Lumileds had sales of nearly $2 billion and its pre-tax profit margin reached double digits.

Jinshajiang Venture Capital is mainly based on local Chinese investment. It was founded in 2004, focusing on semiconductor devices and new materials, Internet and wireless communication technology applications, clean energy, etc. The completed investment projects include where to go, Lily, and Didi Taxi, Boston Battery , Crystal Energy (Jiangxi) Co., Ltd., etc.

It is reported that the transaction also includes Philips to transfer more than 600 patents related to LED production and automotive lighting to Lumileds. For China, where the cottage is the mainstream, the overseas application technology that is now purchased is also crucial for the future development of mainstream technology.

After completing the acquisition, Wu Shenjun revealed that the new company will first target the domestic market and hope to achieve IPO. Although Zheng Jianming, a clean energy tycoon closely linked to the transaction, has not appeared, his PV+photovoltaic industry is becoming more and more full.

It is worth noting that Philips' largest competitor, GE, released the “LED Smart Lighting Vision White Paper” on the same day, announcing that green smart lighting is the focus of GE Lighting's future development in China.

Sky price acquisition, or separate listing

The acquisition is a step in Philips' “focus” program. In September 2014, Philips announced that it wanted to divest its lighting business from its healthcare business to find investors. When talking about the reasons for Philips' sale of the lighting business, Wu Shenjun told the 21st Century Business Herald: "Philips will focus more on the medical device industry."

The deal is a sky-high price. Compared to 2005, Philips paid $950 million for the acquisition of Lumileds, which is now sold to Chinese investors for $3.3 billion, with a return rate of more than three times. The Chinese acquirers such as Jinshajiang Venture Capital also benefited a lot.

According to the information, Lumileds is the world's leading manufacturer of lighting equipment, including general lighting, automotive and mobile electronic equipment lighting, the company's business scale covers more than 30 countries, with Volkswagen, BMW, Audi and many other customers.

In addition, Philips will remain an important customer of Lumileds and will continue to maintain a relationship with Lumileds in R&D and supply.

However, for the Jinshajiang consortium, the more important gain is a large number of patented technologies. "Philips will transfer more than 600 patents on LED production and automotive lighting to Lumileds." Wu Shenjun told the 21st Century Business Herald. Analysts said, "This is crucial for China's overseas application technology, which is now dominated by the cottage, for the future development of mainstream technology."

In 2014, the output value of general lighting in China was about 117.1 billion yuan, of which the market share of LED lighting products reached 16.4%, which was about 7 percentage points higher than the 8.9% in 2013. Among them, commercial lighting spurt growth, public lighting grew rapidly, and home lighting began. start up. Due to the huge market capacity and industrial policy support, 2014 was also known as the LED replacement year in the industry.

However, the competition in the LED market is extremely fierce. According to statistics, there are thousands of companies in China that focus on LED lighting, including more than 20 A-share listed companies and 17 small and medium-sized listed companies. The market share of each manufacturer is very scattered. The technical strength and product quality are uneven. The core technology of LED upstream has long been monopolized by the five international giants. Domestic LED manufacturers are facing huge pressure. This acquisition may break the LED monopoly and achieve industrial integration for China.

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