Essilor and Luxottica to merge and create world's biggest eyewear firm
A global eyewear colossus worth almost $70 billion Canadian is set to be created as Italy's Luxottica — owner of Ray-Ban and Oakley glasses — merges with France's Essilor, owner of Crizal, Transitions, Clearly Contacts and other brands.
Essilor said it had reached an agreement with Luxottica's owners for an all-share deal to combine the two lens companies.
Shares jumped in both Luxottica, which is based in Milan, and Essilor, headquartered near Paris.
The new company would have combined revenues of more than 15 billion euros ($20 billion), 140,000 employees and sales in more than 150 countries.
At that size, it is five times larger than Dutch retailer GrandVision and 10 times larger than Italy's Safilo Group in terms of revenue in 2015.
"Finally ... two products which are naturally complementary — namely frames and lenses — will be designed, manufactured and distributed under the same roof," Luxottica's 81-year-old founder Leonardo Del Vecchio said in a statement on Monday.
For its part Essilor said the merger is an effort to meet growing global demand for corrective lenses, sunglasses and luxury frames. Conveniently for both, it also ends recent attempts to encroach into each other's core businesses — Luxottica in making frames, and Essilor in making lenses.
The boards of Essilor and Luxottica approved the merger in meetings Sunday. The deal still needs approval from numerous governments and regulatory bodies.
Luxottica had long been the giant in the sector, with big acquisitions in the U.S. including Ray-Ban. It also does licensing for many fashion brands, including Prada, Chanel, Armani, Burberry and Dolce&Gabbana.
A family-run company based in the prosperous Veneto region, Luxottica was seen as a virtuous example of generational transition when the founder brought in an outside CEO, Andrea Guerra, in 2004. But after 10 years, the founder, Del Vecchio, took back the reins.
Del Vecchio would become executive chairman and CEO of the new entity, called EssilorLuxottica. The chairman and CEO of Essilor, Hubert Sagnières, will become executive vice president and deputy CEO. Sagnières was born in France but has a Canadian connection, dating from when he was Essilor Canada's president in the 1990's.
With files from The Associated Press and Reuters