Luxottica, Essilor: $50 bn merger deal to create european eyewear giant

Italy's Luxottica and France's Essilor on Monday announced they have agreed on a 50-billion-euro merger deal to create an eyewear giant with over 140,000 employees and sales in some 150 countries.

The deal, one of Europe's largest cross-border tie-ups, brings together Luxottica, the world's top spectacles maker with brands such as Oakley and Ray-Ban, with Essilor, the world's leading manufacturer of ophthalmic lenses.
By merging, the companies would have jointly reported net earnings of over 15 billion euros, based on 2015 annual results posted by the two companies, and a net combined operating profit EBITDA of about 3.5 billion euros.

"Finally … two products which are naturally complementary – namely frames and lenses – will be designed, manufactured and distributed under the same roof," Luxottica's 81-year-old founder Leonardo Del Vecchio said in a statement.

The companies said Mr Del Vecchio and Hubert Sagnières, Essilor’s French-Canadian chairman and chief executive, will share executive powers equally. Mr Del Vecchio will become executive chairman and chief executive of the merged group and Mr Sagnières will become executive vice-chairman and deputy chief executive. The merged group will be listed in Paris, according to bankers.

Del Vecchio will take a stake of between 31% and 38% in the merged group through his family holding Delfin, becoming the biggest shareholder. Voting rights will be capped at 31%

Delfin will contribute its 62% stake in Luxottica at a ratio of 1 share in the Italian group for every 0.461 Essilor shares. The French lens maker, a long-time supplier to the Italian group, will launch a mandatory exchange offer on all remaining Luxottica shares at the same ratio, with the aim of delisting Luxottica's shares.