Luxottica agrees 46 billion euro merger with Essilor

Luxottica, the world’s biggest glasses maker, which owns Ray-Ban and Oakley, has agreed to a 46 billion euro merger with French lens maker Essilor.

“Finally, after fifty years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof,” said Luxottica's 81-year-old founder Leonardo Del Vecchio.

The all-share deal is one of Europe's largest cross-border tie-ups and the entity, with a combined revenue in excess of 15 billion euros and more than 140,000 employees and sales in over 150 countries, would represent a “growth platform ideally positioned to seize future opportunities” said both companies in a joint statement.

The merger is aimed at helping both businesses to be in a stronger position to address the vision needs of the 7.2 billion people in the world out of which 2.5 billion people still suffer from uncorrected vision problems.

Hubert Sagnières, chairman and chief executive of Essilor added: “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.”

Luxottica and Essilor merge to create eyewear giant

Based on a preliminary analysis, the merger is expected to boost revenue from 400 million to 600 million euros in the medium term, the companies said, which will accelerate over the long term. It will also hit into the profits of smaller rivals including Italian Safilo Group and Dutch retailer GrandVision.

Del Vecchio 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.”

Del Vecchio founded Luxottica in 1961 and through a series of acquisitions, including Ray-Ban in 1999 and Oakley in 2007, the company has become the world's biggest glasses maker.

The merged EssilorLuxottica will be headquartered and listed in Paris. It will also have a governance structure, with Del Vecchio and Sagnieres serving as executive vice-chairman and deputy chief executive with equal powers as the chairman and chief executive. While the EssilorLuxottica Board of Directors will consist of sixteen members, an even split of Essilor and Luxottica executives.

EssilorLuxottica also noted that an integration committee would be implemented to ensure smooth and successful integration of the two companies.

The deal is expected to close by the end of the year.

Image: Luxottica Facebook