STATES CHRONICLE – Luxottica, possibly best known for being the producer of brands such as Ray-Ban, will be merging with Essilor.
Luxottica Group S.p.A. is an eyewear company. It is based in Milan, Italy and was founded in 1961. The company is considered the largest in the world in the eyewear domain. Luxottica is specialized in the design, manufacturing, and retail of its brands.
These include Ray-Ban, Oakley, and Persol. Sears Optical, Pearle Vision, and Target Optical are also on the list.
The company also produces prescription frames and sunglasses for other designer brands. Burberry, Armani, Prada, Miu Miu, or Chanel are amongst such brands.
Essilor International S.A. is an ophthalmic lenses producer. It is based in Charenton-le-Pont, France. The company was founded in 1849. Essilor also manufactures ophthalmic optical equipment. It is considered the largest producer of ophthalmic lenses in the world.
The company also develops Varilux. This is a progressive lens, the first in the world. It can help correct presbyopia. It also allows for a clear vision. Essilor operations spread over 5 five continents. More than 100 countries are included.
Now, the two companies will be merging. The announcement came this Monday. On January 16, Delfin and Essilor revealed that they signed an agreement. Delfin S.a.r.l. is Luxottica’s majority shareholder. It owns almost 62 percent of all Luxottica shares.
The Luxottica and Essilor merger could create an integrated player in the industry. Its outreach would have a global outreach.
A transaction between the two would entail a strategic businesses combination. Delfin would reportedly be contributing with its entire Luxottica shares. These would be traded for newly-released Essilor ones.
Following the merger, Essilor would acquire a new name. “EssilorLuxottica” will be a holding company. its operating activities would be hived-down into Essilor International. This later would be a wholly-owned company.
Following the transactions, Delfin will still possess shares. It will have in between 31 to 38 percent of the future EssilorLuxottica shares. As such, it would still be the largest shareholder.
The merger of Essilor with Luxottica will increase their outreach. Their products would sell in over 150 countries. They would also have over 140,000 employees.
Essilor’s Board of Directors met on January 15. It unanimously approved the Delfin agreement. Luxottica’s Board of Directors unanimously acknowledged its utility. More exactly, they recognized that it is in the company’s best interests. They also shared the business combination’s strategic rationale.
Essilor and Luxottica will keep their respective Board of Directors. EssilorLuxottica will have a newly created one. It would be composed of 16 members. Essilor and Delfin will each nominate 8 members.
The merger agreement is expected to close by 2017’s second-half. It will come to address the optical needs of around 7.2 billion people at a global level. 2.5 billion of them are believed to still have uncorrected vision problems.
By merging, the two companies will have an estimated worth of around $49 billion. Reports state that the companies had previously considered a deal. This would have taken place in 2014. However, the conditions were reportedly “not right” at the respective time.
Image Source: Wikimedia