Siemens CEO Peter Löscher
Siemens has abandoned its plans to float Osram on the stock market in the wake of disappointing financial results and continued economic turmoil.
The German conglomerate will instead make Osram independent with a spin off to shareholders in spring 2013.However Siemens aims to keep a minority stake in the company.
"Since market conditions continue to be volatile for an IPO,we have decided to pursue a spin-off to our shareholders as the most probable part of divestiture,"said Siemens CEO
Siemens CEO Peter Löscher,"This proposal requires shareholder approval at the next AGM in 2013,and Siemens still intends to remain as anchor shareholder in Osram."
The decision comes after poor third quarter results for Siemens.Net profit was€823 million,sharply below analysts'€1.32 billion estimate.
Not proceeding with the planned Osram IPO incurred a pre-tax loss of€443 million at Osram stemming from accumulated depreciation,amortisation and impairment costs.
Due to this loss,Osram recorded a loss of€351 million in the third quarter,compared to income of€56 million for the same period last year.
Previously announced measures to reduce OSRAM's production capacities for conventional lighting products have also taken a toll.
