The Big News: Essilor And Luxottica Merger

A colossal merger of Luxottica and Essilor, the two super powers in the eyewear industry! The news gets bigger with every word that you read.

With both the groups sharing the same values: the key mission is to improve vision across the world with more innovative techniques, ideas, an entrepreneurial spirit and an international mindset. The two giants of the global eyewear industry- Essilor and Luxottica will merge and become the largest player in the eyewear market.

Luxottica and Essilor would have more than 140,000 employees and sales in more than 150 countries. Based on the companies’ 2015 results, the new company have posted combined net revenues of more than €15 billion and combined net EBITDA of approximately €3.5 billion.

The new company, which will be called, EssilorLuxottica will have brands including Ray Ban, Oakley, Persol, LensCrafters, Oliver Peoples, etc..

The idea behind the merger is to address the vision needs of the 7.2 billion people in the world out of which 2.5 billion are suffering from uncorrected vision. Together, Luxottica and Essilor will be in a stronger position to take the challenge.

 

Not only this, the transaction would allow the combined group to better seize growth opportunities resulting from strong demand in the eyewear market, driven by the increasing need for corrective and protective eyewear and the appetite for strong brands.

The combination would create a key player, operating across all segments of the eyewear industry. The new entity would leverage state-of-the-art production capabilities and widespread distribution networks to better serve clients and deliver value to all stakeholders.

On this occasion, Hubert Sagnières, Chairman and CEO of Essilor stated: “Our project has one simple motivation: to better respond to the needs of an immense global population in vision correction and vision protection by bringing together two great companies, one dedicated to lenses and the other to frames. With extraordinary success, Luxottica has built prestigious brands, backed by an industry state-of-the-art supply chain and distribution network. Essilor brings 168 years of innovation and industrial excellence in the design, manufacturing and distribution of ophthalmic and sun lenses. By joining forces today, these two international players can now accelerate their global expansion to the benefit of customers, employees and shareholders as well as the industry as a whole.”

Leonardo Del Vecchio, Chairman of Delfin and Executive Chairman of Luxottica Group added: “With this agreement my dream to create a major global player in the eyewear industry, fully integrated and excellent in all its parts, comes finally true. It was some time now that we knew that this was the right solution but only today are there the right conditions to make it possible. The marriage between two key companies in their sectors will bring great benefits to the market, for employees and mainly for all our consumers. Finally, after fifty years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof”.

Summing up the merger, it is bringing together two major and complementary global key players in the eyewear industry to improve and address the vision problems and vision health and the appetite for premium branded products. By the means of this merger, the new formed group would be in a position to propose a comprehensive offering combining a strong brand portfolio, global distribution capabilities and complementary expertise in ophthalmic lenses, prescription frames and sunglasses. The new organisation would would represent a growth platform ideally positioned to seize future opportunities, with combined revenue in excess of €15 billion, more than 140,000 employees and sales in over 150 countries.

According to the advisers on the deal have presented it as a merger of equals, Del Vecchio will exchange 62 percent Luxottica stake for 38 percent of Essilor, which makes him the biggest shareholder of the combined group. The new name would be EssilorLuxottica. As mentioned by the analysts, Essilor shareholders are getting a nice deal because the share ratio is implying a 5 percent discount to Luxottica’s closing price which was down 27 percent from its 2015 peak. The French lens maker will launch a mandatory exchange offer on all remaining Luxottica shares at the same ratio, with the aim of delisting Luxottica’s shares.

EssilorLuxottica will have 140,000 staff and will be headquartered and listed in Paris. It will also have a complex governance structure, with Del Vecchio and Essilor Chairman and CEO Hubert Sagnieres effectively sharing the driving seat, while the 16-strong board will have an even split of Essilor and Luxottica executives.

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