BY Richard Summerfield
Following years of speculation, eyewear brands Luxottica and Essilor have announced that they are to merge in an all stock deal worth $49bn, a move which will create a global superpower in the industry.
The new company is expected to have more than 140,000 employees and sales in more than 150 countries, once the deal has been completed. The companies expect the transaction to close in the second half of 2017, subject to regulatory and shareholder approval.
Under the terms of the merger, the newly combined giant will be known as EssilorLuxottica and will be led by Leonardo Del Vecchio, executive chairman of Luxottica Group.
Luxottica, which owns the Oakley and Ray-Ban brands, currently has a 14 percent market share of the eyewear industry, while Essilor has 13 percent. Around half of the combined company’s revenue is expected to be generated in the US. Europe will account for roughly 22 percent, Africa, Asia and the Middle East for around 18 percent.
In a statement announcing the deal, Hubert Sagnières, chairman and chief executive 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."
Mr Del Vecchio said: “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 50 years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof."