Essilor To Merge With Luxottica In $49 Bln Deal

(RTTNews) - France-based optical-lens maker Essilor International SA (EL), Delfin and Ray-Ban maker Luxottica Group (LUX) Monday announced their plan to merge in a deal valued around $49 billion. Essilor would become a holding company with the new name "EssilorLuxottic."

The Luxembourg based Delfin Sarl, the holding company of Del Vecchio family, owns Luxottica. Delfin has agreed to offer shares in Luxottica to Essilor on an exchange ratio of 0.461 Essilor share for one Luxottica share.

Delfin would own between 31 to 38 percent of the shares of EssilorLuxottica and would be its largest shareholder. As per the agreement, the voting rights of any shareholder of EssilorLuxottica would be capped at 31 percent and there would no longer be double voting rights for the shares.

The combined entity with significant synergies would offer strong brand portfolio, global distribution capabilities as well as complementary expertise in ophthalmic lenses, prescription frames and sunglasses.

The combination is expected to create 15 billion euros in revenue with sales in more than 150 countries. Cost synergies would range from 400 to 600 million euros in the medium term and accelerating over the long term. There will be around 140 thousand e employees for the new entity.

Luxottica's Executive Chairman, Leonardo Del Vecchio, would be executive chairman and CEO of EssilorLuxottica. Essilor Chairman and CEO, Hubert Sagnières, would serve as executive vice-chairman and deputy CEO of EssilorLuxottica with equal powers as the chairman and CEO. Leonardo Del Vecchio and Hubert Sagnières would also keep their positions of executive chairman of Luxottica and chairman and CEO of Essilor International, respectively.

The EssilorLuxottica Board of Directors would consist of sixteen members, eight each from both the companies.

Leonardo Del Vecchio, chairman of Delfin and executive chairman of Luxottica Group said, "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 fifty years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof."

Since its creation in 1961, Luxottica, created in 1961, owns famous eye-wear brands, including Ray-Ban and Oakley. Essilor has been specializing in ophthalmic lenses and creating internationally-recognized brands such as Varilux, Crizal, Transitions, etc.

The transaction is subject to Essilor's Works Councils' information and consultation procedure according to French law.