Luxottica and Essilor in 46 billion euro merger to create eyewear giant

Luxottica and Essilor said Monday they had agreed to a 46-billion-euro ($49-billion) merger with a view to creating a global powerhouse in the eyewear industry.

The companies said the deal is expected to bring annual revenue benefits and cost savings in the range of 400 million euros to 600 million euros in the medium term. In addition to the two top executives sharing power, Del Vecchio's Delfin investment company and Essilor will each nominate eight directors for the combined company's 16-member board and the equity of EssilorLuxottica will be about 50 percent owned by each company's shareholders. Luxottica CEO Leonardo Del Vecchio will be the CEO and Chairman of combined entity EssilorLuxottica.

Investor reaction was eye-popping: Shares in Luxottica surged about 9%, while Essilor soared about 14%.

In Paris, shares in the French group went up 16.4.5% to 118.9 euros. The chairman and CEO of Essilor, Hubert Sagnieres, will become executive vice president and deputy CEO.

Essilor would then make a mandatory public exchange offer, in compliance with Italian law, to acquire all of the remaining and outstanding shares of Luxottica at the same exchange ratio.

The acquisition will be executed in shares, with Luxottica shares exchanged for Essilor shares.

Italy's Luxottica operates popular brands including Ray Ban and Oakley while Essilor is having a leadership in ophthalmic lens market.


The biggest shareholder in the new company will be the Del Vecchio family. Meanwhile, Essilor is a market-leading designer and manufacturer of lenses, amassing a revenue of more than €6.7bn ($7.1bn) in 2015.

Sources say more than a dozen first and second line managers have left in the past 2-1/2 years, including in September the head of wholesale and retail in Greater China - a growth region where Del Vecchio has centralised distribution.

"We share the same values, the same vision, the same interest in the products", Sagnieres said.

Del Vecchio, who returned to the helm of Luxottica two years ago after taking a back seat for the previous 10 years, will be CEO and executive chairman of the merged group.

The deal is expected to close by the end of the year and Del Vecchio said he is confident there will be no problems gaining approval from competition authorities.

Luxottica said in September 2014 that discussions had taken place in 2013 but were dropped for a number of reasons, including shareholding governance issues.

  • David Armstrong