French firm Essilor to buy Ray-Ban manufacturer Luxottica for €22.8bn
Luxottica makes frames for luxury brands such as Armani, Chanel, and Prada, and is the biggest eyeglass retailer, with chains including Lenscrafters, Pearle Vision, and Sunglass Hut. Essilor is No 1 in lenses, and also has been expanding in eyewear retailing.
Leonardo Del Vecchio, who created Luxottica in 1961 and controls 62% of its stock, will be executive chairman and CEO of the combined business to be named EssilorLuxottica.
Essilor chief Hubert Sagnieres, 61, will be executive vice chairman and deputy chief executive with powers equal to Mr Del Vecchio’s. Essilor shares gained as much as 19% while Luxottica rose as much as 15%.
Four years after talks began, the 81-year-old Italian billionaire said he is achieving his dream of combining the two businesses, creating one company that’s strong in lenses, frames, and eyeglass retailing.
The deal also solves a protracted succession puzzle for Luxottica, which has had difficulty retaining top management, with two top bosses resigning in 2014. Mr Del Vecchio has said he didn’t want to bring any of his six children into the company.
“This operation would be a perfect fit on paper as both groups are leading their respective categories,” said Cedric Rossi, an analyst at Bryan Garnier.
“Nevertheless, two main question marks remain at this stage: Essilor Luxottica might face antitrust barriers, and management appointments in newcos are quite complicated.”
The deal is the largest acquisition ever of an Italian company by a foreign buyer and adds to a string of such takeovers that has shrunk Italy’s roster of multinational firms.
ChemChina bought tyremaker Pirelli in 2015 and the Pesenti family last year ceded control of cement producer Italcementi to Germany’s HeidelbergCement.
Luxottica is Italy’s fourth-largest publicly traded firm by market value.
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