“Buy, buy, buy” keeps going, one article reviews acquisition cases in the lighting industry in 2023

There are significant similarities between the survival and development of enterprises and the growth model of cells, both of which are constantly evolving in the process of adapting to environmental changes. Mergers and acquisitions between enterprises and cell fusion also have something in common. Their common goal is to achieve greater integration and better survival and development.

Mergers and acquisitions are an essential part of the growth path of most large companies. So, what are the new trends in mergers and acquisitions cases in the lighting industry since 2023? This article will take stock of acquisitions and mergers and acquisitions cases in the lighting field since 2023, and explore the industrial development characteristics behind these cases.

Competition in the LED lighting industry has intensified, and corporate mergers and acquisitions are both expansion and survival

In recent years, the lighting industry has experienced drastic changes, with industry reshuffles accelerating, effective demand increments gradually decreasing, and market competition further escalating. Despite increasingly fierce market competition, the rise of emerging applications in LED lighting has injected new vitality and development opportunities into the entire industry. Manufacturers actively enter market segments, trying to avoid homogeneous competition and cultivate profit growth points by taking a differentiated path, so as to stay ahead of the competition. has achieved considerable development in the fiercely competitive lighting industry.

In the field of smart lighting, with the continuous upgrading of technology and people's continuous pursuit of convenience and smart experience, the demand for smart lighting market continues to expand. TrendForce predicts that the global LED smart lighting market will grow rapidly to US$2.4 billion in 2023. At the same time, with the improvement of people's health awareness and unremitting pursuit of quality of life, the market acceptance of human-based health lighting has continued to increase, and it has also become a new direction for industry development in the eyes of enterprises.

Compared with other lighting market segments, marine lighting is still in the early stage of development, and the market maturity is relatively low, but the potential development opportunities are huge. Currently, Foshan Lighting has begun to actively deploy this market. In addition, although the demand for plant lighting has declined slightly in recent years, the industry remains confident in its long-term development prospects and is looking for new growth opportunities in continuously optimizing product performance. TrendForce estimates that the LED plant lighting market size will be US$1.44 billion in 2023 and will reach US$2.44 billion in 2027.

In the fiercely competitive environment of the lighting industry, segmented areas have brought new growth points to the industry and have also become a key market for manufacturers to compete. Through mergers and acquisitions, companies can quickly obtain the technical resource advantages of the seller's field, seize development opportunities in lighting subdivisions, and realize early layout of niche markets. Therefore, mergers and acquisitions are not only an expansion strategy for enterprises, but also an effective way to cope with competitive pressure and seek survival.

In addition, compared with organic development, mergers and acquisitions have absolute advantages in time and efficiency. By integrating the resources and technologies of the target enterprise, the enterprise can complete the expansion path more quickly, better cope with homogeneous competition, enhance brand influence, achieve economies of scale, and gain a larger market share.

Lighting companies have started the "buy, buy, buy" model, and the lighting subdivision has attracted much attention

According to incomplete statistics from LEDinside, the optoelectronics research division of TrendForce, there will be 14 corporate acquisitions and mergers in the lighting field in 2023. These cases cover smart lighting, marine lighting, plant lighting, UV/ IR special light sources and many other fields.

From the above cases, it can be seen that intelligent lighting is becoming an area of great concern in the lighting industry. Many companies have strengthened their presence in the field of smart lighting through acquisitions and mergers.

Cooper Lighting, a subsidiary of Signify, acquired ILC in March this year to further strengthen its business layout in the field of intelligent interconnection and better meet the needs of the North American intelligent lighting market. In October, Signify also completed the asset acquisition of DLC, a former Panasonic lighting accessories factory. DLC focuses on production control systems and digital lighting solutions, complementing and synergizing with Signify’s existing intelligent interconnected lighting technology and control systems, improving its competitiveness in the smart lighting market.

Signify has adopted an active acquisition strategy in recent years. The companies it has acquired include Kaiyao Lighting, Cooper Lighting, Wiz Connected, etc., rapidly improving its strength in the field of smart lighting. Although the LED lighting market demand has been sluggish in recent years, Signify has continued to expand its business scope, and the LED lighting business surrounding intelligent interconnection technology has become an important source of income.

Unilumin Technology plans to acquire Shikechuang New, enhance the company's competitiveness in the field of consumer application products, and promote the progress of cultivating and incubating new smart entertainment lighting product business. With the completion of this acquisition, Unilumin Technology's lighting business will further extend from the commercial and professional fields to the consumer field.

The acquisition case of FSG, a large American lighting distributor, is also related to smart lighting. LMI focuses on providing lighting products and solutions. This acquisition gives FSG access to LMI’s expertise in lighting services, design and control, helping to expand FSG’s business in the field of smart connected lighting.

In addition to smart lighting, lighting market segments with large profit margins such as plant lighting, UV/IR special light sources, and marine lighting have also become important directions for corporate acquisitions.

Acuity Brands entered the plant lighting market in 2022. The development time is not long, and Current has very rich experience in the field of plant lighting. On November 27 this year, Acuity Brands announced the acquisition of Current’s Arize? product series industry It is expected to accelerate the development and growth of the group's plant lighting business.

On September 15, Heraeus sold 100% of its shares in its special light source business to the American company Acelida Technologies. Heraeus Specialty Light focuses on providing high-quality photonic solutions covering wavelengths from ultraviolet to infrared. After the transaction is completed, Exelida Technologies will expand its product range and fully leverage Heraeus' influence in the market to accelerate business growth.

On October 31, Hainan Technology, a wholly-owned subsidiary of Foshan Lighting, announced its intention to acquire Shanghai Liangzhou. After the acquisition is completed, Hainan Technology will quickly enter and expand the business fields of ships, offshore platforms and related special lighting based on its existing fish lighting, marine aquaculture lighting, deep-sea lighting and other businesses to accelerate the development of the marine lighting business.

In order to adapt to the rapid changes in the lighting industry, companies also use acquisition and merger strategies to achieve multiple goals such as advantage integration, market expansion, product matrix upgrade, and improvement of overall competitiveness.

Sunshine Lighting plans to acquire Zhiyi IoT, aiming to expand the sales market. Through the acquisition of Grand Canyon, Tangshi Lighting fully integrates resources and improves its economy. business performance. Roman shares acquired the equity of British company PREDAPTIVE to accelerate development in the fields of digital cultural tourism and AR/VR. Xiaosong Co., Ltd. acquired the equity of Foshan Puxi and successfully launched the heat pump business. French businessman Ragni Group has integrated Hess GmbH Licht + Form to consolidate the group's position in the European public lighting market. Inventronics acquired the Osram Lighting Digital Systems Division to further improve its business layout in the field of LED drive power products.

In summary, mergers and acquisitions in the lighting industry are more biased towards technologies and markets in niche areas. These acquisition cases reflect the flexibility and foresight of enterprises in the lighting industry in catering to market demand, integrating resources, and expanding business boundaries. Companies choose different paths in mergers and acquisitions to better adapt to the diversity of industry development.

It is worth mentioning that in M&A activities, the acquirer is usually considered the dominant player, but for the seller, through wise decisions and favorable transaction conditions, positive changes in finance, strategy and competition can also be achieved.

Through the transaction, the seller can divest non-core assets products, helping companies free up resources, focus efforts and improve the competitiveness of their core businesses. Taking ams Osram as an example, by divesting non-strategic core businesses such as the Lighting Digital Systems Division, the company can focus more on core technology areas such as light sources, visualization and sensing. The company has previously sold LED drive power, intelligent lighting, plant lighting, automotive lighting, architectural lighting applications and other businesses.

Hubbell, a well-known company, has focused its resources on the company's leading energy infrastructure field by reducing and selling businesses that lack growth momentum in the short term, such as home lighting, commercial and industrial lighting. This strategic adjustment will not only help maintain the company's current profitability, but also find new development points for the company.

In addition, by merging with large companies, the seller can create synergies and improve overall business efficiency, thereby creating a larger market share. For example, through the merger, the technology portfolio of Heraeus Specialty Light Sources can be combined with the existing wide range of plasma and LED products of American Exelida Technologies to expand the product range and create synergy effects.

Finally, through M&A transactions, sale In order to achieve capital returns, for some companies facing market risks or fierce competition, selling their business to more stable and powerful companies can also reduce the company's operating risks.

The integration of the lighting industry has quietly arrived, and brand and scale are the key to development

As an act of survival of the fittest and resource complementarity in market competition, corporate mergers and acquisitions play an important role in improving resource utilization efficiency and achieving economies of scale. Currently, the LED lighting industry is going through a stage of consolidation and reshuffle, and is in a fiercely competitive environment. In this context, companies with brand and scale advantages can more easily concentrate superior resources, extend the industrial chain, expand market share, and consolidate and enhance their market position.

At the same time, the fierce competition in the lighting industry and the rapid advancement of science and technology have prompted companies to more actively carry out technological innovation, open up blue ocean markets, and find new application scenarios. Therefore, the company has deployed smart lighting, health lighting, plant lighting and other subdivisions to enrich revenue sources and enhance profitability.

In this process, the development of brand and scale has become a lighting The core driving force for industrial integration, and mergers and acquisitions are an effective means for companies to achieve this goal. The lighting industry is in a critical period of changes in the industrial structure. Adapting to market changes, continuing to innovate and seizing segmented areas have become the key for companies to gain competitive advantages.

Take Signify as an example. As the lighting business group of the century-old brand Royal Philips, it was split into an independent listed company "Philips Lighting" in 2016 and officially changed its name to Signify in 2018. Relying on the strong brand advantage of Philips, Signify has expanded its scale through a series of extension M&A strategies after its independent listing, mainly focusing on areas such as intelligent interconnected lighting, animal lighting, plant lighting, and architectural lighting. Although the overall performance of the LED lighting market lacks momentum, Signify is optimistic about and actively deploys relevant market segments, effectively enhances its strength in digital, technology and smart lighting through mergers and acquisitions, and continues to maintain market competitiveness.

For Chinese companies, building brand and scale is a key part of entering the international market. By increasing brand awareness, companies can not only establish a global image but also achieve scale. Expanding and further attracting more consumers and partners will help shape the company's image in the international market.

In the domestic market, competition is more intense due to the high degree of transparency in the production and supply chain. Therefore, the key to enterprise development lies in comprehensive thinking and overall layout, from product cost performance to channel coverage, from offline to new retail, from marketing methods to brand and scale upgrades, etc. Only by comprehensive consideration can we find the most suitable strategy to achieve long-term development.

Foshan Lighting has gradually improved its brand influence and corporate scale through the horizontal and vertical extension of its business in recent years. Sunshine Lighting plans to actively expand its own brands, build domestic sales channels and enhance brand influence by increasing capital to hold Zhiyi IoT. When Sanxiong Aurora recently accepted questions from investors, it said that if there are suitable opportunities in the lighting segment, the company will also consider improving the company's overall comprehensive competitiveness through mergers and acquisitions to further consolidate the company's position in the lighting industry.

Overall, mergers and acquisitions are a key strategy to promote corporate development. By integrating resources and broadening the industrial chain, companies can better adapt to market changes and achieve sustainability continued innovation and competitive advantage. In the context of the reshuffle of the lighting industry, companies with strong brands and scale will be more likely to stand out in the fiercely competitive market.

However, it should be noted that finding the "Chollima" is only the first step in a company's M&A strategy. In the subsequent operation and management stage, companies need to plan carefully to ensure that the integration can proceed smoothly, including synergies in technology research and development, marketing, talent management and other aspects. Enterprises should maintain keen insight and adjust strategies at any time.