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Freedonia Analysis: LED Producer MLS Takes Over Full Ownership of LEDVANCE, Maker of SYLVANIA Light Bulbs
CLEVELAND, April 6, 2018 /PRNewswire/ -- In March 2017, a consortium of three Chinese companies MLS Company, IDG Capital, and Yiwu acquired LEDVANCE from OSRAM Licht. This week, MLS became the sole owner of LEDVANCE in a deal with the other two buyers that gives them shares in MLS.
Among the three companies that bought LEDVANCE from OSRAM, MLS is the only one that was already a manufacturer of LED lighting IDG Capital and Yiwu are investment firms so it's no surprise that MLS will now take over production of LEDVANCE's lighting products. As a major supplier of LEDs to the global market, MLS can provide LEDVANCE a streamlined supply of LEDs and related components, which is expected to put the SYLVANIA brand in a more competitive position.
According to Freedonia analyst Matt Breuer, this acquisition is part of a larger trend whereby which the traditional market leaders in the lighting industry OSRAM Licht, General Electric, and Royal Philips have begun to hand over their general purpose lighting businesses to other companies that can produce LED lighting more profitably. In addition to OSRAM's divestiture of LEDVANCE, Royal Philips spun off Philips Lighting in 2016 and relinquished its controlling interest in the company in 2017. And although no agreement has been made, General Electric began soliciting offers for its GE Lighting division in June 2017.
Now that LEDs have rapidly become the dominant light source in practically all lighting applications, the industry's competitive landscape has been thoroughly disrupted. Breuer states, "Making LED lighting is very different from making incandescent and fluorescent lighting, so the traditional market leaders have had to decide how to adapt: make dramatic changes to materials sourcing and production processes, or hand the business over to someone better poised to compete in the world of LEDs. What makes acquisitions like this so dramatic is that it's some of the most influential brands in lighting SYLVANIA, GE, and Philips that are starting to change hands."
For more information on the outlook of the lighting industry, see the following studies by The Freedonia Group:
General Purpose Lighting Fixtures in the US (Q2 2018)
Smart Lighting in the US (Q3 2018)
About The Freedonia Group, a division of MarketResearch.com The Freedonia Group is a leading international industrial research company publishing more than 100 studies annually. Since 1985, we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Additional Consumer Goods studies can be purchased at https://www.freedoniagroup.com/, www.marketresearch.com and www.profound.com.
SOURCE The Freedonia Group
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