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Mulinsen's Ledvance case will be approved by the German government
According to foreign media Drive Vision News, the German lighting giant OSRAM has sold its general lighting business LEDVANCE to the China Investment Consortium headed by IDG Capital, which seems to have made new progress or will soon be approved by the German government. In late October 2016, a few days after the German government revoked the decision to approve the acquisition of Ai Siqiang by Chinese companies for security reasons, the German Ministry of Economic Affairs suddenly stopped the acquisition of LEDVANCE by a Chinese consortium composed of IDG and Mulinsen. In July 2016, IDG Capital, China's lighting giant Mulinsen and the financing unit Yiwu City State-owned Assets Operation Center formed a Chinese consortium to acquire LEDVANCE for 400 million euros (about 4,395,800 US dollars). Upon completion of the transaction, Yiwu State-owned Assets Operation Center and Mulinsen will each hold a 36% stake in LEDVANCE, and IDG Capital will own 28% of LEDVANCE. Under the terms of the acquisition, Mulinsen will prioritize the purchase of LED chips from Osram's new Malaysian LED chip factory. In addition, OSRAM will receive additional trademark license agreements to pay. Based on the agreement, Ledvance products will continue to use the Osram and Sylvania brand name, but the relevant technology and other intellectual property specifications have clear specifications, Ledvance can continue to develop products on this basis, but Osram only authorized to use and The patent was not sold. Initially, the German government wanted to intervene because of concerns about technology outflows to Mulinsen. However, as the acquisition deals primarily with LEDVANCE's global marketing assets, such as LED bulb distribution networks, and does not involve sensitive technology, the German government is expected to approve the transaction. According to sources from Mulinsen and Osram, the German government will approve the transaction in the second quarter of 2017. IDG's acquisition of Ledvance is expected to usher in an optimistic result in 2017, while Aixtron and other German technology companies are not so lucky. The industry is also more aware that the German government's control over foreign investment will be more stringent. Legal expert Lexology said that the current cross-industry review is mandatory for foreign investors who are directly or indirectly acquiring more than 25% (including 25%) of German companies' non-EU residents or non-European Free Trade Association members. If Germany decides to ban a deal, it needs to be approved by all federal ministers of the cabinet. Lexology estimates that the legal basis for German foreign investment review procedures will become more stringent, which may have a negative impact on M&A transactions. Lexology recommends that foreign investors interested in German companies be aware of these changes in the early stages of M&A negotiations and gain more insight into Germany's new impact on foreign investment review procedures. In the near future, customs clearance applications are expected to become more cumbersome and investors need to be more prepared.