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Austria's AMS returns with buyout offer for Osram

Austrian sensor solutions company AMS AG said Aug. 11 that it submitted an all-cash bid to acquire OSRAM Licht AG for €38.50 per share.

The bid, which values OSRAM at an enterprise value of €4.3 billion, rivals a €35-per-share buyout offer from Bain Capital LP and Carlyle Group LP that OSRAM had accepted in July.

Provided that OSRAM waives the standstill agreement, AMS plans to launch its offer by Aug. 15, with the offer period commencing prior to Sept. 5.

In announcing the proposal, AMS noted that a combination of the two companies would create a "global leader in sensor solutions and photonics with approximately €5 billion of revenue."

It marks a dramatic reversal from less than a month ago, when AMS appeared to have abandoned moving beyond a nonbinding expression of interest to buy the German lighting company, saying that it did not see "sufficient basis" to proceed.

AMS will initially finance the transaction with a €4.2 billion acquisition bridge facility underwritten by HSBC and UBS, but noted that it plans to later refinance the deal by raising some €1.5 billion in new equity, primarily through a rights issue.

The company expects the transaction will result in some €240 million in annual cost savings and €60 million in annual revenue synergies, most of which it expects to realize within 24 months after the deal's completion. To realize these synergies, AMS expects to incur one-off integration costs of about €400 million.