Companies news
Ray-Ban Maker Luxottica to Merge With Lens Company Essilor, Creating $49 Billion Eyewear Giant
Luxottica Group SpA, maker of Ray-Ban, has agreed to a merger with French optical-lens maker Essilor International SA, placing its Italian founder at the helm of a globe-spanning colossus with brands gracing European catwalks and California beaches.
Under the deal, the companies will carry out a complex share swap that will make Leonardo Del Vecchio—Luxottica’s 81-year-old founder and executive chairman—the top executive and largest shareholder of a firm with a combined market value of around €46.3 billion ($49.16 billion).
Mr. Del Vecchio will exchange his 62% Luxottica stake for 38% of Essilor, which will be renamed EssilorLuxottica. The Paris-listed company will then offer Luxottica’s outstanding shareholders 0.461 of each of its shares for one of Luxottica’s, leaving Mr. Del Vecchio with 31% of EssilorLuxottica, the firms said in a joint statement.
The merger joins two companies that previously risked stepping on each other’s toes as Luxottica expanded into lens manufacturing and Essilor moved into frames. Last year, Exane BNP Paribas warned the profit pool for both companies could shrink because of a harsher price competition for frames and lenses.
Instead the combined companies will have about 27% of the eyewear market, putting them far ahead of other competitors, such as Johnson & Johnson Inc. and Safilo Group SpA, both with market shares below 4%, according to Euromonitor. The merged companies will have a combined annual revenue of €15 billion and earnings before interest, taxes, depreciation and amortization of €3.5 billion. Both companies expect annual synergies worth between €400 million and €600 million.
