Essilor and Luxottica Merge to Create 46 billion Euro Eyewear Giant
French eyewear major Essilor and Italian company Luxottica have announced Euro 46 billion merger to create an eyewear giant. Italy’s Luxottica operates popular brands including Ray Ban and Oakley while Essilor is having a leadership in ophthalmic lens market. The combined entity will have annual revenue of nearly Euro 15 billion.
Luxottica's 81-year old founder, Leonardo Del Vecchio will be the largest shareholder in the combined entity with his family holding company Delfin picking up nearly 35 percent stake in the company. Essilor will continue trading on stock markets. The current shareholder in Luxottica will receive 0.461 shares of Essilor for every share held in Luxottica.
French company Essilor will offer mandatory exchange offer to Luxottica shareholders. This will result in delisting of Luxottica from stock markets.
The combined company will be called EssilorLuxottica and its shares will trade in Paris. Luxottica CEO Leonardo Del Vecchio will be the CEO and Chairman of combined entity EssilorLuxottica.
The sunglasses and ophthalmic lens market is expected to grow in years to come as people become conscious of eye care and buy more of sunglasses. With rising vision issues, ophthalmic lens market is expected to witness higher revenues in future.
After staying out of business operations for nearly a decade, Del Vecchio recently returned as CEO of the company. Under his leadership Luxottica improved its network and sales strategies. The company continued facing tough times in the U.S. market. The company generates nearly 59 percent of its revenue in the U.S. market. Since taking the lead, Del Vecchio has stepped up investments to boost Luxottica's retail network and increased its lens manufacturing business.
The deal is expected to help the combined entity to improve sales for both segments.
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