Unspecified CFIUS Concerns End the Deal
HONG KONG, Jan. 22, 2016 /PRNewswire/ -- GO Scale Capital and Royal Philips announced today that the parties have terminated their March 2015 agreement for GO Scale Capital to acquire 80.1% of Royal Philips' LED lighting components and automotive lighting business, Lumileds. After close to one year of best efforts by GO Scale Capital and Royal Philips to obtain approval from the Committee on Foreign Investment in United States (CFIUS), the parties have been unable to resolve CFIUS' unspecified concerns.
"GO Scale Capital has been and continues to be a fiercely committed advocate for clean, renewable energy and technology development globally, in sectors such as LED lighting, electric vehicles and energy storage," said GO Scale Capital Chairman Mr. Sonny Wu. "GO Scale Capital's vision of building world-class technology industries in China combines advanced technology with the powerful market engines in China, and focuses on the industrialization of mature technologies to serve vast demand in high-growth, emerging industries in China and around the world."
In the case of the Lumileds transaction, Royal Philips chose GO Scale Capital as the buyer because of its deep LED industry knowledge and access to markets and capital that would have generated accelerated growth and scale for the company. The transaction would have combined Lumileds' world-leading technology and know-how with the highly competitive LED manufacturing industrial base in China. The deal fit GO Scale Capital's investment model of leveraging market forces to build world-class companies that transform and reshape global industries.
Despite persistent attempts by GO Scale Capital and Royal Philips to make the case for the Lumileds transaction under principles of openness and fairness, unfortunately all such efforts fell short of addressing unexplained government concerns. During the process, GO Scale Capital was very transparent about its bona fide commercial and market-oriented interests to invest in technologies and apply them towards global sustainable development to generate attractive investment returns.
"Moving forward, we are not deterred from our goal of building the world's leading LED lighting company; and China will inevitably become the leader of the global LED industry because of its industrial ecosystem and competitive advantages in scale and cost," added Mr. Wu. "We will continue to seek opportunities through early stage investments in technology, mergers and acquisitions, as well as talent and disruptive ideas that can change the world for a better and more sustainable future. The GO Scale Capital team will fully leverage its technical expertise and financing capability to complete deals in the $2-10 billion USD range. We will be relentless in pursuing opportunities underpinned by our unwavering mission of building world-class technology enterprises in clean technology and energy industries globally."
About GO Scale Capital
GO Scale Capital is a technology focused private equity fund under the GSR Capital family of funds, with offices in Beijing, Hong Kong and Silicon Valley. The fund's team brings together years of cross border operating experience and successful co-investment history in cutting edge technologies. The fund's goal is leveraging powerful market engines in China to build world-class companies that transform and reshape global industries.