Siemens to Sell Off Osram Lighting Business through Fall IPO

German conglomerate Siemens (News - Alert) will undergo a major corporate restructuring initiative that will include the sale off its Osram business, the world's number two lighting company. The industrial giant will also create a new business unit that will focus on large-scale green energy projects.

Chief Executive Peter Löscher told the company's supervisory board on Monday that Siemens will take Osram public later this fall. Löscher did not specify how much Siemens hopes to make from the IPO, but indicated that the company will sell a majority stake in Osram, according to the Wall Street Journal.

Osram generated sales of $6.6 billion in fiscal year 2010, resulting in $802 million in profit. The influx of cash from the IPO should help enable the business unit to better compete with the dominant leader in the lighting game, Philips (News - Alert) Electronics.

“With the IPO, we want to give Osram complete entrepreneurial freedom to comprehensively further develop its leading competitive position in a lighting market being swept by technological changes,” Loescher noted in a statement.

Wolfgang Dehen, the current CEO of Siemens' energy sector, will leave his position to head Osram's executive board. Dehen will then transition to the role of chief executive at Osram as soon as the company goes public.

As another part of the restructuring plan, Siemens will create a fourth major division dubbed infrastructure and cities, which will package together a number the company's current industrial and energy wings. The new business unit will include the Siemens' building technology group as well as its power distribution and transport equipment sectors. The German company said that the newly created division will look to take advantage of the growing market for green infrastructure projects in major global cities.

“We are orienting Siemens toward technology leadership in a broad spectrum of energy-efficient solutions for cities and industries. With this move, we intend to top the $140 billion mark in business volume in the next few years,” Loescher said.

Siemens' three other major business units – healthcare, industry and energy – will remain intact.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Janice McDuffee