Siemens has ditched plans to float its lighting subsidiary Osram on the stock market, opting instead to spin the business off to existing shareholders.
The German industrial giant announced in March last year its plan for an initial public offering (IPO) for Osram, but now intends to make Osram independent through a spin-off in spring 2013, retaining a minority stake.
Siemens CEO Peter Löscher told investors today: 'Since market conditions continue to be volatile for an IPO, we have decided to pursue a spin-off to our shareholders… This proposal requires shareholder approval at the next AGM in 2013, and Siemens still intends to remain as anchor shareholder in Osram.'
The announcement came as Siemens revealed disappointing financial results amid 'deteriorating' market conditions in the third quarter of its financial year.
Abandoning the planned IPO meant a pre-tax hit of €443 million (£346 million) to Osram's accounts, representing depreciation, amortisation and other costs. This, combined with the cost of measures to reduce production capacity for conventional lighting products, resulted in a €351 million (£274 million) loss for Osram in the quarter. Its revenue for the period was up 12 per cent, but only one per cent once acquisitions and currency effects were excluded.
For Siemens as a whole, revenue was up three per cent but profits were well below expectations, which the company said would make it harder to hit its full-year profit targets.
