Luxottica, the sunglass owner of Rayban and Oakley, will merge with French sunglass titan Essilor. Together the brands project to serve 7.2 billion consumers around the world.
Based on a preliminary analysis, the combined group is expected to progressively generate revenue and cost synergies ranging from €400 million to €600 million in the medium term and accelerating over the long term.
Together, 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 would have posted combined net revenues of more than €15 billion and combined net EBITDA of approximately €3.5 billion.
The combination would create a key player, operating across all segments of the eyewear industry.
The Board of Directors of Essilor held on January 15, 2017 unanimously approved the agreement with Delfin, which it considered to be in line with the best interests of shareholders, employees and other stakeholders, and decided to initiate the information and consultation of its works councils on the basis of such proposed transactions.
The Board of Directors of Luxottica, held on the same day, unanimously acknowledged that the transaction is in the best interest of Luxottica and shared the strategic rationale of the business combination.
The transaction will entail a strategic combination of Essilor’s and Luxottica’s businesses consisting of Delfin contributing its entire stake in Luxottica (approx. 62 percent) to Essilor in return for newly issued Essilor shares to be approved by the Essilor shareholders meeting, on the basis of the Exchange Ratio of 0.461
Essilor will become a holding company with the new name “EssilorLuxottica” via a hive-down of all of its operating activities into a wholly owned company, to be called Essilor International, and the contribution by Delfin of its Luxottica shares. Following the transaction, Delfin would own between 31 and 38 percent of the shares of EssilorLuxottica and would be its largest shareholder.
If all goes as planned, Luxottica’s Executive Chairman, Leonardo Del Vecchio, will serve as executive chairman and CEO of EssilorLuxottica. Essilor chairman and CEO, Hubert Sagnières, will serve as executive vice-chairman and deputy CEO of EssilorLuxottica with equal powers as the Chairman and CEO. Del Vecchio and Sagnières will also keep their positions of executive chairman of Luxottica and chairman and CEO of Essilor International, respectively.
Photo courtesy Oakley
