EANS-Adhoc: ams AG / ams to launch new takeover offer for OSRAM at EUR 41.00 per share with minimum acceptance threshold of 55% EAE

Friday, 18. October 2019 17:24
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Mergers - Acquisitions - Takeovers
18.10.2019

Premstaetten - NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN
PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

* Combination of ams and OSRAM to create a global leader in sensor solutions and
  photonics with tangible benefits for customers
* Step change for both companies, leveraging European sensor and photonics
  technology to drive growth, margin improvement and continued investment
* As the largest shareholder in OSRAM with a direct shareholding of 19.99%, ams
  is confident in succeeding with its highly attractive and fully valued offer -
  the best option for OSRAM shareholders
* Reflecting on its position as the pre-eminent shareholder, ams has lowered the
  minimum acceptance threshold to 55%
* EUR 41.00 offer price reflects a premium of 42% to the undisturbed share price
  of OSRAM as of 2 July 2019 (EUR 28.92)
* Constructive discussions with OSRAM based on Cooperation Agreement with
  stakeholder commitments and protective covenants for OSRAM employees and
  manufacturing sites in Germany
* Cost and revenue synergies with an expected annual pre-tax run-rate in excess
  of EUR 300 million, representing significant value creation
* EUR 4.4bn committed bridge facility and EUR 1.6bn underwritten equity
  issuance, resulting in pro-forma Dec-2019 net debt/EBITDA ratio of 4.5x or
  3.4x adjusted for run-rate synergies

Premstaetten, Austria (18 October 2019) -- ams (SIX: AMS), a leading worldwide
supplier of high performance sensor solutions, announces that it intends to
launch a new all-cash takeover offer for OSRAM Licht AG ("OSRAM") for 100% of
the share capital of OSRAM at a price of EUR 41.00 per share ("Offer"). The
Offer which represents a premium of 42% to the undisturbed OSRAM share price of
EUR 28.92 as of 2 July 2019 will be launched by ams Offer GmbH, a newly
incorporated, wholly owned subsidiary of ams. ams is the largest shareholder in
OSRAM with a direct shareholding of 19.99% which ams will not exceed outside of
the Offer. As a result of ams' shareholder position, ams has lowered the minimum
acceptance threshold to 55%.

Winning way forward for ams and OSRAM
The combination of ams and OSRAM allows ams to create a global leader in sensor
solutions and photonics with approximately EUR 5 billion of revenue. This
accelerates ams to win in new breakthrough optical solutions, expedites the
diversification of ams' revenue mix, enhances its manufacturing footprint with
clear scale and cost advantages, and leverages the complementary go-to-market
strengths of both companies. This combination is a winning way forward for
OSRAM, its employees and shareholders as it creates a compelling technology
platform and a stronger combined company. Designed to enable profitable growth,
the combination will accelerate time-to-market for new solutions and increase
content opportunities across end markets. In addition, the Offer is also
consistent with the criteria ams has publicly stated for large transactions,
i.e. it is strategically compelling, demonstrably value enhancing, financially
accretive, achievable with a sustainable capital structure, and fits with ams'
financial model.

"We are pleased to announce the launch of the new takeover offer to acquire
OSRAM, delivering on our stated intention," said Alexander Everke, CEO of ams.
"We are convinced that our Offer will be successful as it provides a highly
attractive, fully valued price at a straightforward acceptance threshold. As the
pre-eminent OSRAM shareholder at 19.99%, we are furthermore convinced that this
Offer is the best available option for OSRAM's shareholders. The strategic
rationale of creating a global leader in sensor solutions and photonics, with
strong European roots, is unchanged and offers a compelling opportunity for
OSRAM, ams and our shareholders.

We are in constructive discussions with OSRAM to update the existing Cooperation
Agreement, clearly underpinning our commitments to employees and manufacturing
locations in Germany. We appreciate the fruitful discussions with the Management
and Supervisory Board of OSRAM and look forward to working alongside the present
OSRAM Management Board to realize our strategic vision."

Comprehensive stakeholder commitments
ams and OSRAM seek to update the existing Cooperation Agreement, building upon
the binding, comprehensive commitments aimed at safeguarding OSRAM employees and
manufacturing sites in Germany. ams re-affirms all existing commitments entered
into on 21 August 2019, including that ams will continue to operate OSRAM's
existing German production sites for a minimum period of 3 years
(Standortsicherung), create jobs in manufacturing and engineering in Germany,
designate Munich to serve as a co-headquarter of the combined group with a
strong presence for global corporate functions, continue existing shop
agreements (Betriebsvereinbarungen), collective bargaining agreements
(Tarifverträge) and similar agreements in Germany, and ensure existing OSRAM
pension plans will remain unchanged. At the same time, ams' concept for the
successful integration of both companies encompasses OSRAM and its stakeholders,
including unions and employee representatives.

Financially attractive transaction
The Offer results in significant value creation from cost and revenue synergies
with an expected annual pre-tax run-rate in excess of EUR 240 million and EUR 60
million, respectively. The expected COGS synergies of more than EUR 120 million,
primarily relate to the streamlining and optimization of the combined global
manufacturing footprint. The expected operating expense synergies of more than
EUR 120 million, primarily relate to the alignment of corporate functions, IT
and R&D programs. The expected revenue synergies resulting in a pre-tax value of
more than EUR 60 million are driven by leveraging joint go-to-market
opportunities. ams expects the majority of these synergies to be delivered
within the first 24 months post completion independent of ams' final ownership
level. In order to realize these synergies, ams expects to incur one-off
integration costs of approx. EUR 400 million. In the longer term, ams
anticipates significant additional revenue synergies from accelerating roadmaps
in new optical solution and photonic areas.

The Offer values OSRAM at an enterprise value of EUR 4.6 billion, equivalent to
8.1x Sep-2019 adjusted EBITDA after run-rate cost and revenue synergies (EUR 565
million), and 17.3x Sep-2019 adjusted EBITDA based on consensus estimates (EUR
265 million). The Offer is expected to be accretive to ams' earnings per share
from the first year post completion adjusted for cost synergies. The returns
from the transaction including cost synergies are expected to exceed the
weighted average cost of capital of ams from the second year post completion.

Sustainable financing structure
The financing of the Offer has been secured through a EUR 4.4 billion bridge
facility fully underwritten by HSBC, UBS and BAML which will be refinanced
through a combination of equity and debt issuances. ams intends to raise EUR 1.6
billion (issue currency CHF) of new equity, which is fully underwritten by HSBC
and UBS, primarily in the form of a rights issue and other equity-linked
instruments. Pro-forma for the EUR 1.6 billion equity issuance, ams expects that
the transaction will result in a pro-forma Dec-2019 leverage of approximately
4.5x net debt/EBITDA or approximately 3.4x net debt/EBITDA adjusted for run-rate
cost and revenue synergies. ams expects to de-leverage quickly based on the
expected strong cash flow profile of the combined group.

Timeline
Subject to approval by BaFin, ams intends to commence the four week offer period
for the Offer by the end of October. The Offer will be subject to customary
closing conditions, including regulatory clearances. ams expects to complete the
transaction in the first half of next year.

Advisers
UBS is acting as lead financial adviser, together with HSBC in conjunction with
the Transaction. Bank of America Merrill Lynch is acting as financial adviser to
the Supervisory Board of ams. Linklaters, Schellenberg Wittmer and Herbst Kinsky
are acting as legal advisers to ams. Brunswick is acting as communication
adviser to ams. PwC provided financial due diligence as well as accounting and
tax advice to ams.

###

About ams
ams is a global leader in the design and manufacture of advanced sensor
solutions. Our mission is to shape the world with sensor solutions by providing
a seamless interface between humans and technology.
ams' high-performance sensor solutions drive applications requiring small form
factor, low power, highest sensitivity and multi-sensor integration. Products
include sensor solutions, sensor ICs, interfaces and related software for
consumer, communications, industrial, medical, and automotive markets.
With headquarters in Austria, ams employs about 9,000 people globally and serves
more than 8,000 customers worldwide. ams is listed on the SIX Swiss stock
exchange (ticker symbol: AMS). More information about ams can be found at https:
//ams.com [https://ams.com/]

Join ams social media channels:
>Twitter [https://twitter.com/amsAnalog] >LinkedIn [https://www.linkedin.com/
company/ams-ag] >Facebook [https://www.facebook.com/amsAnalog] >YouTube [https:/
/www.youtube.com/user/amsAnalog]

Important notice:
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares in OSRAM ("OSRAM Shares"). The terms and further provisions
regarding the Offer by ams Offer GmbH (currently still operating under Blitz
F19-566 GmbH), a wholly-owned subsidiary of ams, to the shareholders of OSRAM
will be set forth in the offer document which will be published following
approval of its publication by the German Federal Financial Supervisory
Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). Holders of OSRAM
Shares are strongly recommended to read the offer document and to seek
independent advice, where appropriate, in relation to the matters therein.
Moreover, this announcement is neither an offer to sell nor a solicitation of an
offer to purchase shares in ams.
The release, publication or distribution of this announcement in certain
jurisdictions other than the Federal Republic of Germany and Switzerland may be
restricted by law. Persons who are resident in, or are subject to, other
jurisdictions should inform themselves of, and observe, any applicable
requirements.
The Offer will be made in the United States of America in reliance on, and
compliance with, Section 14(e) of the US Securities Exchange Act of 1934 and
Regulation 14E thereunder, as exempted thereunder by Rule 14d-1(d).
To the extent permissible under applicable law or regulation, and in accordance
with German market practice, ams Offer GmbH (currently still operating under
Blitz F19-566 GmbH), its affiliates and/or brokers acting on their behalf may,
outside of the United States of America and in compliance with applicable law,
from time to time make certain purchases of, or arrangements to purchase,
directly or indirectly, OSRAM Shares or any securities that are immediately
convertible into, exchangeable for, or exercisable for, OSRAM Shares, other than
pursuant to the Offer, before, during or after the period in which the Offer
will remain open for acceptance. These purchases may occur either in the open
market at prevailing prices or in private transactions at negotiated prices. Any
information about such purchases would be disclosed as required by law or
regulation in Germany or other relevant jurisdictions.
The shares of ams have not been and will not be registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or sold
within the United States except pursuant to an applicable exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act. There will be no public offering of shares in the United States.
This announcement may contain statements about ams and/or its subsidiaries
(together the "ams Group") or OSRAM and/or its subsidiaries (together the "OSRAM
Group") that are or may be "forward-looking statements". Forward-looking
statements include, without limitation, statements that typically contain words
such as "anticipate", "target", "expect", "estimate", "intend", "plan",
"believe", "hope", "aims", "continue", "will", "may", "should", "would",
"could", or other words of similar meaning. By their nature, forward-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. ams cautions
you that forward-looking statements are not guarantees of the occurrence of such
future events or of future performance and that in particular the actual results
of operations, financial condition and liquidity, the development of the
industry in which ams Group and OSRAM Group operate and the outcome or impact of
the acquisition and related matters on ams Group and/or OSRAM Group may differ
materially from those made in or suggested by the forward-looking statements
contained in this announcement. Any forward-looking statements speak only as at
the date of this announcement. Except as required by applicable law, ams does
not undertake any obligation to update or revise publicly any forward-looking
statement, whether as a result of new information, future events or otherwise.
ams is a registered trademark of ams AG. In addition many of our products and
services are registered or filed trademarks of ams Group. All other company or
product names mentioned herein may be trademarks or registered trademarks of
their respective owners. Information provided in this press release is accurate
at time of publication and is subject to change without advance notice.

Further inquiry note:
Moritz M. Gmeiner
Vice President Investor Relations
Tel: +43 3136 500-31211
Fax: +43 3136 500-931211
Email: investor@ams.com

end of announcement                         euro adhoc
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issuer:       ams AG
              Tobelbader Strasse   30
              A-8141 Premstaetten
phone:        +43 3136 500-0
FAX:          +43 3136 500-931211
mail:         investor@ams.com
WWW:          www.ams.com
ISIN:         AT0000A18XM4
indexes:      
stockmarkets: SIX Swiss Exchange
language:     English

EAX0019    2019-10-18/17:24

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