Four Features of M&A in the Chinese LED Industry in 2015

Mergers and acquisitions (M&A) are occurring at a rapid pace in the LED industry. Based on incomplete statistics compiled by LEDinside editorial team in China, more than 37 mergers have occurred in the LED industry during first half of 2015, averaging three acquisitions per month. Acquisitions in the industry are maturing, and new M&A trends have emerged.

Scope of acquisition covers entire industry chain

Statistics complied show the industry’s M&As involve the entire supply chain from upstream material and chip makers all way to downstream end product manufacturers. Broken down into supply chain sectors, there have been seven LED chip and sapphire acquisitions, 11 LED package mergers, and 19 LED display and lighting M&As in 2015. Downstream manufacturers comprised the largest group of mergers, amounting to 51.35% of M&As.

Additionally, the importance of patents is becoming increasingly visible. International manufacturers have started to spin off their LED businesses, and more Chinese companies are grabbing global lighting companies LED businesses to expand their patent portfolio. This has been observed through Go Scale Capital’s acquisition of Lumileds, China Electronics Corporation (CEC) subsidiary Kaistar’s acquisition of Bridgelux and others.

Maturing financial integration and cross-industry acquisitions becomes new norm

LED display manufacturers started their entry into LED lighting industry in 2012, mostly through M&As. This form of business model has become very common in 2015, such as Ledman acquisition of Torshare, Leyard’s merger with LEDavenue, Aoto Electronics merge with Gold Lamp and others. These acquisitions indicate LED display manufacturers have not given up on obtaining LED lighting market shares Following maturing capital integration, LED manufacturers are no longer satisfied with just the LED lighting market, many of the M&As now involve IoT or Internet companies, advertisement and sports companies. These have all become the altest arsenals in the LED industry, for instance Liantronics acquisition of an advertisement company, and Ledman’s investment in Swiss Media Infront Sports.

M&As still popular among manufacturers despite high financial and industry supply chain integration requirements 

In the past the industry supply chain integration has leaned towards the formation of alliances between two big manufacturers, but the maturing LED industry market has now spurred coalition between multiple parties. The new partnership models prefers connecting upstream and downstream clients. Integration of suppliers has also become highly desirable. For instance Guangdong Rising Assets Management (GRAM) investment in Foshan Lighting this year has been interpreted by industry specialists as the integration of GRAM finances with Nationstar R&D capacity, and Foshan Lighting’s distribution channel. Kaistar’s acquisition of Bridgelux, followed by MLS’s investment in Kaistar is also viewed as a classical example of joint partnerships between large manufacturers in the different segments of the supply chain.

Manufacturers relying on M&As to improve financial performance

Due to intensifying competition in the LED industry, more than 40% of Chinese LED manufacturers’ annual revenue performance declined in 3Q15. However, 60% of Chinese manufacturers’ revenue performance grew through consolidating revenue from newly acquired companies, for instance Changfang Lighting combined Kamisafe revenue in April 2015, Leyard consolidated Leafun revenue in July this year, and in August it went on to add Glux financial report. LianTronics also reported it  integrated Time Share Media’s revenue in May, while Utop and Eastar revenues were consolidated in March 2015.

(Author: Sophie Liu, Editor, LEDinside Chinahttp:// Translator: Judy Lin, Chief Editor, LEDinside)

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

Tokushima, Japan - 6 March 2024: Nichia, the world's largest LED manufacturer and inventor of the high-brightness blue and white LED, has started mass production of the new UV-B (308nm) and UV-A (330nm) LEDs in its popular 434 Series packa... READ MORE

New XLamp® S Line LEDs enhance growth, last longer, lower energy costs Horticulture and other forms of agricultural lighting require application-tuned ratios of spectral content, high efficacy and long lifetimes. Whether you are interested... READ MORE