FRANKFURT Siemens AG is expected to publish details of the long-awaited spin-off of Osram on Wednesday after its supervisory board meets to set out a future course for the lighting unit.
Sources have told Reuters that Siemens plans to keep less than 20 percent of Osram, the world's No. 2 player in the 40 billion euro ($51.9 billion) lighting industry after Philips, while passing on the rest to its shareholders.
In a separate meeting on Thursday, Osram's supervisory board is expected to approve plans for a restructuring program costing 500 million euros and thousands of jobs, sources have said.
"Five hundred million euros of restructuring for a company with roughly 5 billion euros of revenues sounds like a high number," a London-based analyst said.
Osram will cut jobs mostly outside its German home market as part of the program, sources have said, having already shrunk its workforce by 2,000 to 39,000 over the past year.
"I would clearly take (a program of that magnitude) as a sign that management is keen to give the new company a good start and to spare Osram's new shareholders costs associated with lapses of the past," the analyst said.
Osram, whose brand is 106 years old, has been slow to adapt to a shift from traditional light bulbs to more energy efficient and durable light-emitting diodes (LEDs) as parent Siemens shied away from investing in the semiconductor-based technology.
Meanwhile, Asian rivals such as South Korea's LG Electronics and Samsung Electronics have built up capacity, driving down prices.
Sources have told Reuters that Osram will publish the prospectus for its listing on December 7, which should provide investors with the financial details they need before approving the planned spin-off at Siemens' annual general meeting on January 23 and deciding whether to keep or sell Osram shares.
"It is not a question of price but of the story," said Stephan Thomas, who manages Frankfurt Trust's FT Frankfurt-Effekten-Fonds, with a volume of almost 2 billion euros including about 1.4 million Siemens shares.
Before making a decision, he said he would want to hear more from Osram's management about the company's growth, margins and capital structure, whether it aimed to pay shareholders a dividend and what plans it had for the future.
Consultancy McKinsey sees the LED market reaching a volume of almost 65 billion euros by 2020, accounting for close to 60 percent of the overall lighting market.
LEDs are used to for flat-screen televisions and tablet PCs but are also becoming increasingly popular as a source of general lighting, in shops or restaurants, for outdoor displays, or for headlights in cars.
(Reporting by Maria Sheahan; Editing by Helen Massy-Beresford)