Though Siemens and OSRAM have now gone their separate ways, the two companies can look back on a shared history that lasted for almost 100 years. Over that time, the lighting manufacturer developed into one of the most iconic brands in the world. And today it’s known around the world as the quintessential name in lighting. Siemens’ role in that evolution was anything but trivial.
Sensible cooperation – Siemens, AEG and Auergesellschaft
One of the fastest-growing segments of the electrical industry prior to World War I was light bulb production. The sector owed its development in part to the tungsten lamp, with its tungsten filament, which had been in production since 1905. To sell this product, a number of companies decided together on the OSRAM name – which combines the osmium method with the second half of the German word for tungsten, “Wolfram.” Inventor Carl Auer von Welsbach trademarked the name with the Imperial Patent Office in Berlin in 1906.
After losing their foreign markets in the aftermath of World War I, Germany’s three leading light bulb makers – AEG, Siemens & Halske and Deutsche Gasglühlicht AG (Auergesellschaft) – sensibly decided to pool their interests. Their aim: to hold their own better against foreign competition and recover their lost markets. The decision was eased by the fact that the companies had already agreed back in 1911 to largely standardize their lamp shapes and types, through a patent and experience exchange.
Founding the company – OSRAM light bulbs dominate the world market
Deutsche Gasglühlicht AG had already outsourced its light bulb business in November 1918, and founded a limited partnership for the purpose, Osram-Werke GmbH KG. Siemens & Halske and AEG joined in as limited partners on February 5, 1920. The partnership’s first fiscal year was defined to begin on its founding date, which was set retroactively to July 1, 1919.
By the 1930s, OSRAM was one of the biggest makers of lighting products in the world. Its market share in Germany alone came to more than 70 percent. To tap markets abroad, it set up numerous sales agencies in the form of separate companies, built in part on investments of foreign capital. OSRAM owed its lead in the world market not least of all to an ongoing intensive dialog with an international range of manufacturers. For tax reasons, the OSRAM GmbH KG limited partnership was converted to a full German limited liability company, a GmbH, in 1956.
Siemens becomes sole owner – The journey toward a 100 percent stake
AEG had fallen into a crisis, during which its shares in KWU and TU were taken over by Siemens AG in 1977. Siemens’ CEO at the time, Bernhard Plettner, made the most of the opportunity to acquire AEG’s stake in OSRAM as well. Up to that point Siemens had held 43 percent of the company, AEG 36 percent, and General Electric Company 21 percent. When Siemens acquired AEG’s stake in 1976, its ownership interest grew to 79 percent of OSRAM. Two years later, in 1978, General Electric confronted Siemens with two alternatives: either sell GE the majority of OSRAM’s capital, and thus hand over its management, or else buy GE’s stake itself. Siemens opted to take over the company.
It was a far-sighted decision on Plettner’s part. OSRAM subsequently performed extremely well, in both technological and economic terms. In 1978, Plettner assumed the chair of OSRAM’s Supervisory Board. From that year onward, the company – where Plettner’s younger brother Helmut had been CEO since 1976 – was back in the black. The slump OSRAM had been suffering since the early 1970s was quite rightly regarded as overcome. The company was once again able to build up reserves.
Vigorous growth, a new legal form – From OSRAM GmbH to OSRAM Licht AG
As the 1980s began, OSRAM was the world’s fourth-largest lamp manufacturer, with 28 production facilities, 18 of them outside Germany. In market standing, the company was third in Latin America, second in Europe as a whole, and first in Germany. Between 1989 and 2013, OSRAM GmbH operated as a corporate unit with separate legal status.
In July 2013, the lighting manufacturer was spun off from Siemens and taken public as OSRAM Licht AG. Siemens retained a 19.5 percent stake in the new company for the time being.
As a publicly listed company, OSRAM will have direct access to the capital market, as well as the opportunity to sharpen its public profile. In our view, OSRAM stock will be an attractive investment and an interesting, independently tradable asset.Peter Löscher, CEO of Siemens AG, January 23, 2013
In October 2017, Siemens sold the remainder of its ownership interest in this historic lighting company, marking the end of the last chapter in a shared story of Siemens and OSRAM that had endured for nearly a century.