Europe’s Largest Cross-border Tie-up Creates Eye-wear Giant
Sunday night, Italy’s Luxottica and France’s Essilor agreed a $49-B merger to create a global giant in the eye-wear industry with annual revenue of more than $17-B, they said in a statement Monday.
The transaction, one of Europe’s largest cross-border tie-ups, brings Luxottica, the world’s top eye-wear maker with brands such as Oakley and Ray-Ban, with Essilor, the world’s leading manufacturer of ophthalmic lenses.
“Finally … 2 eye-wear products which are naturally complementary, namely frames and lenses will be designed, manufactured and distributed under the same roof,” Luxottica’s founder Leonardo Del Vecchio, 81 anni, said in a statement.
By merging, the companies will be better positioned to take advantage of strong demand in a $95-B market expected to achieve continued growth because of an aging global population and increasing awareness about eye care in Asia and Latin America.
The companies said the transaction is expected to bring annual revenue benefits and cost savings in the range of about $00-M in the medium term.
Mr. Del Vecchio, who returned to the helm of Luxottica 2 years ago after taking a back seat for 10 years, will be CEO and Executive Chairman of the merged EssilorLuxottica, which will be listed on the Paris bourse.
Mr. Del Vecchio will take a stake of about 36% n the merged group through his family holding Delfin, becoming the biggest shareholder. Voting rights will be capped at 31%.
Essilor’s Chairman and CEO Hubert Sagnieres will be Executive vice-Chairman and deputy CEO, with the same powers as the Chairman and CEO.
In a call with financial journalists Monday, Mr. Sagnieres said the companies’ combined operations will be able to offer a much faster service to their customers.
The companies expect rapid growth in the global eye-wear market, saying that at least 2.5-B people in the world still suffer from uncorrected vision problems.
Since retaking the lead at his firm, Mr. Del Vecchio has stepped up investments to boost Luxottica’s retail network and expanded its lens manufacturing business.
Mediobanca advised Luxottica on the deal, with Essilor advised by Rothschild.
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