German lighting manufacturer Osram has started a round of talks with potential buyers of its lamp business, the lineup of candidates includes several large Chinese lighting companies, according to a Reuters report.

Osram has confirmed that it has commissioned UBS to choose the preferred buyer for its lighting business. Analysts estimate the lamp business could be worth $1.1 billion including debt.

The lamp division is in the process of becoming a separate entity, and officials said the company has been in informal talks with potential buyers including Chinese companies since April this year.

Chief candidates include listed companies, such as Foshan Lighting, Zhejiang Yankon Lighting and NVC. The report noted the Chinese Central Government often will advise which group should bid for a strategic asset to prevent companies from driving up market prices.

For Chinese buyers that are operating in an extremely competitive domestic lighting market, Osram’s sales channels and brands in Europe and North America could be of great interest.

The foremost attraction for an Asian buyer in acquiring Osram’s lighting business would be the use of the Osram brand and Sylvania in North America, said Jefferies analyst Peter Reilly.

"For an Asian player, not getting a heavy European cost base but getting a strong brand would be very appealing," he said. "I would imagine if you're any one of those Chinese companies this is a once-in-a-generation opportunity."

In addition, several of the private equity groups that were involved in the auction of Philips lighting component business earlier this year are expected to show interest in Osram’s lamp business, such as CVC, KKR and Bain Capital.