(Bloomberg) — Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Osram Licht AG is backing a $4.4 billion takeover offer from AMS AG after reaching an agreement with the Austrian sensor maker that will protect workers from merger-related layoffs until 2022.Osram recommended Tuesday investors accept the proposal of 41 euros a share in cash, saying it “represents an appropriate valuation of the company.” The German car-parts supplier also reported better-than-expected fourth-quarter earnings, while pushing back mid-term targets. The shares rose 0.2% to 40.22 euros in Frankfurt.Osram’s decision to back a deal with rival AMS is a step forward in the months-long takeover battle. AMS’s offer running until Dec. 5 is its third attempt to acquire Osram, which has suffered amid a slump in the automotive industry. Although holding firm on the price, AMS has lowered the minimum acceptance threshold to 55% to make it easier to get a deal over the line.AMS successfully beat off rival suitors Bain Capital and Advent International and has amassed an almost 20% holding in Osram to strengthen its footing. The tussle for control of the former Siemens AG division was sparked by a series of profit warnings due to its exposure to the car sector.While Osram reported better-than-expected fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization, the company pushed back by two years its mid-term financial goals.For the 2020 fiscal year, the company expects a “moderate change” in revenue, in the range of minus 3% to 3% growth, and an adjusted Ebitda margin between 9% and 11%.The guidance suggests “very limited” operational improvement and “raises questions on the long term potential of the company,” Morgan Stanley analysts including Lucie Carrier wrote in a report.Osram’s labor representatives had come out against a deal with AMS out of concern for the company’s 24,000 workers and restructuring plan.Read more: Osram’s Top Labor Leader Urges German Watchdog to Block AMS Bid“The most important thing is that the employees at German locations are protected,” Osram’s Chief Executive Officer Olaf Berlien said in the statement Tuesday.(Updates with shares in second paragraph.)To contact the reporter on this story: Oliver Sachgau in Munich at [email protected] contact the editors responsible for this story: Anthony Palazzo at [email protected], Tara Patel, Andrew NoëlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
