* Buyout groups to bid for Philips lamps unit end-Jan -
sources
* Mainly Chinese bids for Osram lamps ops seen next week -
sources
* Divestments allow groups to focus on core business
(Adds valuation, details)
FRANKFURT, Jan 8 (Reuters) - Companies interested in
lighting assets will be able to bid for top European brands
Philips PHG.AS and Osram OSRn.DE in two separate auctions
starting this month, industry sources on Friday.
The divestments will allow Philips and Osram to focus on
their core businesses and draw a line under businesses they view
as having a low growth potential and shrinking margins.
Potential strategic buyers, mainly from China, hope the
brand names and distribution networks will help sell their own
products globally, while private equity players may restructure
the businesses and sell them later.
Dutch technology group Philips PHG.AS has put its lighting
arm -- the world's largest maker of lights -- on the
block.
While Philips has not yet decided whether to list the
lighting business on the stock exchange or outright sell it, it
has asked for tentative bids for the unit, which may be valued
at roughly 4-6 billion euros ($4.36-6.53 bln), by the end of
January, people familiar with the deal said.
Private equity groups will likely value the business at 7-8
times its expected core earnings, the sources said.
Over the past four quarters ending Sept. 30, 2015, Philips
Lighting reported sales of around 7.2 billion euros and earnings
before interest, tax and amortisation (EBITA) of around 630
million euros, stripping out more than 200 million euros worth
of impairment and restructuring charges.
A consortium comprising buyout groups KKR KKR.N , CVC
CVC.UL and Onex OCX.TO is expected to make an offer for the
business, as well as peers Bain, Apollo APO.N , Blackstone (N:BX)
BX.N and Chinese bidders, they said, adding that U.S.-based
Acuity AYI.N may show interest in parts of the unit.
Philips Lighting recently struck partnerships with Apple
AAPL.O and Cisco CSCO.O in a bid to bring high-margin
programmable LED lighting to homes and offices.
Separately, Philips last year agreed to sell its smaller
Lumileds unit to Chinese investors in March. But doubts arose
over the deal in October after a U.S. government body raised
objections.
Philips may have found a way to close that deal, a person
familiar with the matter said.
A Philips spokesman said discussions with U.S. authorities
are ongoing, and the closing of the deal is uncertain, declining
to comment further on the two sales.
"While the runner-ups in the Lumileds sale (KKR, CVC, Bain)
had been told until late 2015 to be ready for renewed bids, they
are now receiving the message that tweaks to the Lumileds deal
have made it quite likely to go through," the person said.
OSRAM
Separately, German peer Osram OSRn.DE has asked for
tentative bids for its traditional lamps business with 2 billion
euros in sales and roughly 100 million euros EBITA next week.
Bidders are likely offer to value the business at roughly
500 million euros, the sources said.
While the traditional light bulb business is expected to
decline as more energy efficient technologies like
light-emitting diodes (LEDs) emerge, Osram has attracted
interest from Chinese buyers, who are interested in the brand
and distribution channels in Europe and the United States.
Chinese LED products maker MLS 002745.SZ is expected to
make an offer, sources familiar with the deal said, as well as a
consortium comprising Chinese group Foshan 000541.SZ and
buyout group Bain.
Shanghai Feilo Acoustics 600651.SS , which said in July it
already had made a non-binding offer, is no longer pursuing the
asset, the sources added.
"The sales process is ongoing," an Osram spokesman said.
The prospective bidders for Philips and Osram lamps
businesses declined to comment or were not immediately available
for comment.
($1 = 0.9184 euros)