Luxottica and Oakley Complete Merger…

Luxottica Group and Oakley completed the merger between the two companies for a total purchase price of approximately $2.1 billion. Oakley will now be a wholly-owned subsidiary of Luxottica and, as a result the combined companies expect for fiscal year 2007 of €5.7 billion and consolidated pro forma EBITDA for the same period of approximately €1.2 billion. Oakley's outstanding shares of common stock have been converted into the right to receive $29.30 per share, in cash.

Luxottica management said that they expect that the merger will result in approximately €100 million per year in operating synergies within three years, driven by revenue growth and efficiencies between the two companies. Scott Olivet, Oakley’s CEO, said that the main synergoes will come from inventory management and freight. In addition the two companies can do a “much better job” at new product launches with much greater collaboration.

Oakley also pointed to the opportunity in prescription sales. Earlier this year, Oakley began a test in LensCrafters and the results of those tests have gone “extraordinarily well” even though there hasn't been any consumer communication that LensCrafters is a resource for Oakley. Olivet said he was “pleasantly surprised” by the fact that Rx sales in LensCrafters have outnumbered sunglass sales by 3 to 1. Oakley will be looking to expand the test from 100 to 300 doors in Q1.

On the retail side, the two brands together have over 6,000 stores across the world in China, Australia, Italy, UK, South Africa and North America. With this many locations, management said that they can “significantly improve consumer experience and, at the end, our numbers in the next four years.”

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Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

Luxottica and Oakley Complete Merger

Luxottica Group and Oakley, Inc. completed the merger between the two companies for a total purchase price of approximately $2.1 billion. Oakley will now be a wholly- owned subsidiary of Luxottica Group and, as a result of the completion of the merger, Oakley's shares will cease to trade on the New York Stock Exchange. Cobined, the two companies expect consolidated pro forma net revenues for fiscal year 2007 of €5.7 billion and consolidated pro forma EBITDA for the same period of approximately €1.2 billion. Luxottica Group expects that the transaction will result in approximately €100 million per year in operating synergies at the operating income level within three years, driven by revenue growth and efficiencies.

Commenting on the merger, Andrea Guerra, CEO of Luxottica Group S.p.A., said, “We are extremely pleased with the closing of the merger with Oakley, with whom we have been partners for a long time. We have long admired the Oakley brand, products, and corporate culture. Joint teams from the two companies have been focusing for months on the tremendous business opportunities we have ahead, which will become operating plans by year-end. Today represents the beginning of a new phase for all of us, a journey which will make our Group much stronger going forward.”

Scott Olivet, CEO of Oakley, Inc., commented, “The fact that Luxottica and Oakley had similar beginnings, share the same values around the importance of brand and product, and have individuals around the world who have worked closely for years, gives us a very strong foundation for success. While we have tremendous work in front of us, our early integration planning efforts give us confidence that the value of this combination can, in fact, be realized. We are excited to begin the next chapter in our history.”

In accordance with the terms of the June 2007 merger agreement, Oakley's outstanding shares of common stock have been converted into the right to receive $29.30 per share, in cash. Citibank has been appointed as the paying agent for Luxottica Group.

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