UPDATE 3-Osram to spark lighting M&A after Siemens spin-off

* Siemens says Osram will look for partnerships

* Says plans IPO of Osram light bulb unit in late 2011

* Says to sell more than 50 percent of Osram in IPO

* Siemens shares down 0.8 pct, in line with DAX index

(Adds further details, updates shares)

By Edward Taylor and Roberta B. Cowan

FRANKFURT/AMSTERDAM, March 29 (Reuters) - Lighting group
Osram will pursue takeovers and alliances once it is spun out of
German conglomerate Siemens (SIEGn.DE) in an initial public
offering (IPO) late this year.

Osram, the world's No. 2 player in the 40-45 billion euros
($56-64 billion) lighting market after Philips (PHG.AS), will be
listed as part of a revamp of Siemens, Europe's biggest
engineering company. [ID:nLDE72Q099]

"There will be a lot of opportunities for collaboration with
other companies," Siemens Chief Executive Peter Loescher told
Reuters Insider television on Tuesday.

Kepler analyst Peter Olofsen said he expects Osram to target
more lighting and fixtures companies in Europe, where many
players are only active in parts of the market or a limited
number of countries.

Osram, estimated to be worth 5-7 billion euros, ranks above
General Electric (GE.N) and competes with Panasonic (6752.T) and
CREE (CREE.O).

Lights made by Osram, a company with a history spanning more
than 100 years, illuminate the statue of Jesus Christ in Rio de
Janeiro as well as the Oktoberfest in Munich.

Shares of Philips rose on news of the planned IPO, and were
up 1.0 percent at 1034 GMT, while Siemens shares fell by 0.8
percent. The Dutch company declined to comment on the Siemens
plan. [ID:nWEA1378]

ING analyst Sjoerd Ummels said he expects Osram's valuation
to be boosted by the IPO, as it will no longer be held back by
Siemens' lumbering conglomerate structure.

He said Osram could be floated at 11.5 times 2012 earnings
before interest and tax (EBIT). That compares with a current
valuation of Philips Lighting of 10 times 2012 EBIT, he said.

Spinning off Osram -- the only unit within the conglomerate
which does not carry the Siemens brand -- will free up capital
and allow Siemens to tap into a growing green energy market,
Loescher said.
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Factbox on the EMEA IPO pipeline [ID:nLDE71K1XB]

Reuters Insider show on: link.reuters.com/fuk78r

Dealtalk on upcoming listings [ID:nLDE72E26A]

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SELLING THE REST

Siemens plans to sell off just over 50 percent of Osram,
chief financial officer Joe Kaeser said. It is looking to
complete the flotation in the latter part of 2011 and will
remain a major long-term shareholder.

"I could also imagine an IPO in several steps," Ruland
Research analyst Heino Ruland said.

"Siemens would first sell a majority, then reduce its stake
to 25 percent and eventually sell the rest."

Kaeser said no banks had been mandated for the deal, which
will be the biggest German IPO since Deutsche Post (DPWGn.DE)
floated in 2000.

Osram will have a solid supply of capital and is looking at
a credit rating of A minus or BBB plus, Siemens said.

The Osram flotation is part of a larger overhaul of Siemens
announced on Monday under which it will create a fourth
division, "infrastructure and cities", alongside existing
energy, industry, and healthcare units.

Loescher said he would continue to slim down a company which
makes everything from high-speed trains to light bulbs. Siemens
has already taken a more active spin-off strategy, selling IT
unit SIS in December, as well as a minority stake in military
tank maker Krauss-Maffei Wegmann.

The Osram spin-off would have no impact on Siemens's outlook
for the current year, Loescher said.

Loescher hinted at acquisitions, saying Siemens has a
revenue target of 100 billion euros in the mid-term, including
"inorganic growth". It had 2010 revenues of 76 billion euros.
(Additional reporting by Axel Threlfall in London, Tom
Koerkemeier in Frankfurt; Writing by Alexander Smith and Maria
Sheahan; Editing by Dan Lalor and Mike Nesbit)
($1=0.7084 euros)