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NEW €4bn+ BID FOR OSRAM

NEW €4bn+ BID FOR OSRAM

German lighting manufacturer Osram has announced that it is in negotiations with Austrian sensor and semiconductor firm AMS AG following a takeover offer by the latter. 

The takeover would see ams acquire all outstanding Osram shares. AMS is understood to have offered a price of 38.50 euros per Osram share, which Osram estimates is equal to around 4.3 billion euros in enterprise value. 

In a statement issued on 14th August, Osram claimed to have been in talks with AMS since the previous day and would ‘continue to do so’. Regarding acceptance of the offer, Osram said it viewed ams AG’s financing concept – which involves bridge financing of 4.2 billion euros by investment banks HSBC and UBS – as ‘viable’. 

READ: Bain Capital and Carlyle bid €4bn for Osram

“In addition to the offer price and financing concept, a stable environment is important for Osram’s further transformation into a semiconductor-based high-tech photonics company,” Osram said. “Moreover, it is greatly important to Osram’s Man-

Osram HQ

-aging Board that all key stakeholders are appropriately protected, in particular the company’s employees and the essential parts of the company.” 

READ: Osram completes Ring Automotive acquisition

It is the second takeover offer for Osram in as many months. Private equity firms Bain Capital and The Carlyle Group made a similar offer for the public takeover of all Osram shares – albeit for a slightly lower share price of 35 euros per shares – in early July. Under the offer – which is still ongoing – Osram said it would retain its name and rights to all patents. At the time, Olaf Berlien, CEO of Osram, said: “Bain and Carlyle are the right partners for Osram at the right time.” 

Talks are ongoing. 

 

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180 UK JOBS AT RISK IN MAHLE PLANT CLOSURE

180 UK JOBS AT RISK IN MAHLE PLANT CLOSURE

The Telford production location of automotive component supplier Mahle is due to close. 

In a company statement released in June, Mahle announced that it ‘considers the closure of its production location in Telford and enters into the corresponding collective consultation process.’  Closure is expected to take place in 2020-2021. 

On 8th August, a statement on behalf of plant manager Scott Ferguson said that the consultation process had been completed, according to a Shropshire Star report.

The closure creates uncertainty for the approximately 180 employees at the plant, which produces various parts used in OE production and filters for the firm.

Mahle claimed that the closure ‘results from declining order levels, which are expected to deteriorate even further due to the changed strategic direction of automobile manufacturers in Great Britain.’

The plant is not the only Mahle location set to close. In June, the company announced plans to close its Ohringen location in Germany amid a challenging market and competition. 

Closure of Telford site is imminent

In a financial report for the 2018 business year, Mahle reported sales of 12.6 billion euros before adjustments and reported over 79,000 employees – a growth of 1.6 percent. 

Aftermarket operations in the UK, centred at Bilston, are not affected in the restructure.

 

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ALLIANCE AUTOMOTIVE UK ACQUIRES ASMF

ALLIANCE AUTOMOTIVE UK ACQUIRES ASMF

Alliance Automotive UK, the parent company of GroupAuto and UAN buying groups has acquired the seven-branch Autostores Motor Factors chain (ASMF). Terms of the deal have not been disclosed. 

Originally known as Sureparts and Panels and Paints, ASMF was a member of the PDP Group and PDP Chairman Alistair Whatmore was Managing Director. 

READ: JIM MAZZA JOINS THE PDP

ASMF is Alliance Automotive UK’s 12th acquisition of 2019, although it is the first this year to have been obtained from outside of the firm’s own buying groups. 

READ: AUTOSTORES GROUP ACQUIRES BARUM

This deal brings the total number of branches to be added to AAUK’s portfolio this year to 26, with a combined annual turnover in the region of £40m. 

We’ll bring you more info on this story as we get it. 

 

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UNIPART WINS EXTENSION TO JLR PACKING CONTRACT

UNIPART WINS EXTENSION TO JLR PACKING CONTRACT

Unipart Logistics has signed a new contract with Jaguar Land Rover to retain packing services for a further four years.

The contract provides work for around 100 colleagues at Unipart’s Honeybourne site in Worcestershire and Baginton site in Coventry and will run to the end of 2022.

The operation packs around 800,000 parts every month prior to them being put into storage and distributed across the Jaguar Land Rover global network.

Unipart Logistics started packing for Jaguar Land Rover in 2007 at the Honeybourne site. The service was extended to Baginton in 2010. Since then, the scope of Unipart’s service has grown to the point where the full range of Jaguar products are now packed.

Account Director Elizabeth Satinet said: “I’m delighted we have secured this contract at both Baginton and Honeybourne. The packer operation is a highly visible activity to a multitude of areas within the Jaguar Land Rover supply chain and requires significant collaboration with the customer.

“The team has really worked hard to streamline the processes using digital solutions to enhance the quality and efficiency of the service and enable us to win this four year contract”

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LKQ CONFERENCE FOCUSSES ON CHANGE MANAGEMENT

LKQ CONFERENCE FOCUSSES ON CHANGE MANAGEMENT

A conference between managers within the LKQ  Europe took place at Wembley recently with a focus on change management.

Nick Zarcone, CEO LKQ Corp. spoke at the conference

John Quinn, CEO of LKQ Europe, underlined the need for embracing the modern era: “It is clear we can’t assume the coming years will resemble the past because things are changing faster than ever before. We need to anticipate these opportunities and act. We all need to recognise the critical need to adapt and change as there is a massive opportunity for LKQ to actively shape the independent aftermarket for the benefit of our customers, employees and shareholders” he said.

The conference attendees agreed that the key to continued success is putting customers first through helping the customers understand and navigate the changing environment.

READ: HAMILTON APPOINTED NEW CEO OF EURO CAR PARTS

Arnd Franz, COO pointed out: “We need to offer our garage customers everything they need for a successful business – service, support, equipment and training on new issues arising from the technology shift. We have to grow LKQ in order to gain the scale effects required to provide our customers with solutions that will allow them to remain competitive. We need to support them with logistic networks that give them flexibility and speed for their customers. We need to equip them with brands and concepts upon which end-customers can rely”.

READ: ECP PARENT TO ACQUIRE STAHLGRUBER

Nick Zarcone, CEO of parent company LKQ Corporation, focused the executives’ attention on the fact that taking care of the employees will be as crucial as catering to the customers in the future: “We need to attract the best in class talent that embody our values. And we need to help our employees embrace the upcoming change while simultaneously keeping the customer the centre of attention”, he stated.

READ: ROBOTIC FUTURE OF STAHLGRUBER

In the UK, LKQ Europe is best known for Euro Car Parts and its body panels and paints business. On the continent the corporation also owns Sator Group, Rhiag Group, Elit, AutoKelly, and Stahlgruber, as well as a recycling specialist Atracco. It also holds a minority interest in publicly traded Mekonomen which is headquartered in Sweden.

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SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET

SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET

Automotive components and systems manufacturer Schaeffler has published its financial report for the first half of the year. 

Company revenue, reported as €7.2 billion euros for the first six months, decreased at constant currency by 0.8 percent in what the report referred to as a ‘persistently difficult market environment’. This was driven largely by the automotive divisions, while the industrial division saw some revenue growth. 

Meanwhile, the firm’s earnings before interest and taxes (EBIT) margin was 7.7 percent compared with the prior year’s 11.0 percent margin, with the decrease attributed to a decrease in gross margin and higher expenses. However, this did improve from 7.5 percent in the first quarter to 7.9 percent in the second. 

READ: SCHAEFFLER PLANT SOLD IN MBO

The Automotive OEM division saw revenue of approximately 4,514 million euros for the first half of this year, with the firm claiming a drop of 2.9 percent on last year in constant currency. Though the company did say that ‘order intake was very encouraging in the first six months, totaling 7.7 billion euros’ and that the E-Mobility business division won a 1.1 billion euro supply contract.

Schaeffler’s Langen HQ

Similarly, the Aftermarket division also reported a revenue of 905 million euros, a drop of 2.4 percent at constant currency, attributed to a ‘considerable decline in revenue in the Europe region’. EBIT before special items was reported as 136 million euros compared to 177 million euros in the prior year, while EBIT margin before special items was 15.1 percent, down from 19.3 percent in the prior year. 

READ: SCHAEFFLER’S NEW DATA DIVISION

Dietmar Heinrich, CFO of Schaeffler, said the company is ‘increasingly successful in managing our use of capital more efficiently,’ and noted: “In the second half of 2019, we will focus on even stronger discipline regarding cost and capital and on generating cash flow. 

Meanwhile, Klaus Rosenfeld, CEO of Schaeffler, noted the ‘persistent weakness’ of the global automotive business, and said: “Following a difficult first six months that fell slightly short of our expectations, we believe that the market environment will remain challenging in the second half of 2019 as well.

“We have acted on this trend by adjusting our full-year guidance for 2019,” he said. 

 

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‘EXTREMELY DANGEROUS’ CALLIPERS ON THE MARKET SAYS REMANUFACTURER

‘EXTREMELY DANGEROUS’ CALLIPERS ON THE MARKET SAYS REMANUFACTURER

Not all brake callipers are remanufactured to the same standard’ according to Wrexham-based Brake Engineering. 

In a statement issued to CAT, the firm says that it has seen problems in this category in the market. 

“Not all callipers available in the market today are remanufactured the same” the statement reads. “Several competitor units we have tested are being sold with reclaimed pistons, which could result in component failure or splitting the piston seal”. 

“These callipers also have had mounting holes and castings machined. A machined mounting hole could alter the critical dimensions of the calliper and increase the wear and strain during use. Machined castings could again alter the critical dimensions of the unit, increase the original pad gap and create uneven pad wear, which would result in brake squeal or brake judder”.

The firm also reported that the quality of new-in-box callipers was variable. “Currently, there are also a number of ‘new’ callipers entering the market. We have also tested a number of these callipers being sold on to independent garages. While these products may appear fit for purpose there performance has been found to be severely questionable. While aesthetically they look fine, under closer testing all units were shown to have “porosities” (holes) and oxides in the material and all had partly inhomogeneous microstructures, which could result in weakening of the unit and be extremely dangerous when braking under normal driving conditions” the statement concluded. 

We’ll be following up the company’s assertions in September’s remanufacturing feature. 

 

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MUKESH: ‘I WANT A £200m BUSINESS BY 2025’

MUKESH: ‘I WANT A £200m BUSINESS BY 2025’

Mukesh Shah, Founder and Chairman of independent factor chain Motor Parts Direct has told an audience of his plans to grow the business further.

Speaking at the firm’s 20th anniversary supplier meeting and conference, known to all by his first name, Mukesh, said: “Our vision is to have 200 branches and sales revenues of £200m by 2025”.

READ: MPD ACQUIRES ALS MOTOR PARTS

He went on to explain that the target would only be achievable with the commitment of everyone in the company. “You can have a clear vision, but you need excellent people to realise it… We believe that we have the best people in the industry to operate our business”.

Mukesh added that in 2014 he stated an aim to become a £100m business and this was realised a little over a year later through a mixture of organic growth and acquisitions.

Mukesh at MPD Awards

Originally a regional chain based in East Anglia, the firm now has 120 branches across England and Wales. It has benefitted from the acquisition of other long-established regional chains, including Kevin Cooper, CAFCO and Central Auto Supplies. MPD is now the UK’s largest independent factor chain.

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OSRAM IN €4bn TAKEOVER BID

OSRAM IN €4bn TAKEOVER BID

Private investment firms Bain Capital and The Carlyle Group have teamed up to make a bid for lighting technology firm Osram at an offer price of €35 Euros per share.

The voluntary public takeover offer – meaning that the two buyers will acquire all shares in Osram – follows several months of discussions and values Osram at around €4 billion in enterprise value. The Bain and Carlyle share price offer is around 21 percent above the closing price of Osram’s shares before the offer was announced on July 3rd. 

Osram management are understood to be supporting the offer, and are expected to recommend that shareholders accept it. Olaf Berlien, CEO of Osram, said: “Bain and Carlyle are the right partners for Osram at the right time.” 

Private Equity bid recommended for Osram

According to an Osram statement, Bain and Carlyle ‘are making extensive commitments with regard to employees and locations,’ and confirmed existing labor agreements and existing pension plans ‘will remain unchanged’. Osram also expects to retain its patents and corporate headquarters in Munich. The firm is also expected to continue operating under its current name after the takeover.

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MOT STRIKE ACTION LIKELY IN NORTHERN IRELAND

MOT STRIKE ACTION LIKELY IN NORTHERN IRELAND

Test centres are larger, but far fewer in NI

The Northern Ireland Public Service Alliance (NIPSA) confirmed strike action for civil servants including MoT workers across Northern Ireland for July 26th. 

In Northern Ireland, tests are administered by government employees at approved centres. Testers have seen their workload and a backlog of tests increase after an increase of around 15,000 MOT bookings in the first quarter of 2019 alone. Drivers can expect a wait of up to 47 days to have their vehicle tested according to a report in the Belfast Telegraph. This shortage of testers and testing facilities is exacerbated by  2,300 motorists failing to present vehicles on time, or in some cases turn up for tests at all.

NIPSA confirmed the strike early in July as part of wider civil service action over pay and terms and conditions, demanding that civil service workers receive pay increases in line with that of Health Service, Local Government and Audit Office employees. The alliance also claimed that there have been attempts to ‘undermine civil servants’ terms and conditions of employment.’ In addition to strike action, NIPSA also called for ‘Action Short of Strike Action’ on the 29th. In a statement, NIPSA claimed that 68.5 percent of nearly 6,000 ballot respondents voted ‘Yes’ for strike action. 

“It is clear that members have sent a strong message that they are not prepared to accept a below inflation pay increase for 2018/19 and demand that the pay negotiations are reopened to ensure that civil servants receive an above inflation increase,” read a NIPSA statement. 

The Northern Ireland Assembly has not sat since January 2017, meaning decisions on matters, such as increasing the number of MOT centres to meet demand, have not been taken.

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