Company - - Jan 16,2017
France-based optical lens maker Essilor International and Italy’s spectacle frames manufacturer Luxottica have agreed on a 50 billion-euro ($53 billion) merger to create a global powerhouse in the eyeglasses market.
The deal, one of the biggest ever in European cross-border transactions, is due to be announced this week. The companies’ spokespersons added that this merger is targeted to have a combined revenue of more than 15 billion euros and would also result in major cost savings.
Luxottica is the world’s leading eyewear manufacturing group and owns brands like Ray Ban, Oakley and Sunglass Hut. Leonardo Del Vecchio, Luxottica’s 81-year-old billionaire founder and the richest person in Italy, would become the largest single shareholder in the merged entity and will hold 31 percent of the voting rights in the merging company.
Essilor, on the other hand, is world’s leading manufacturer of lenses and its chairman, Hubert Sagnieres will have equal share executive powers in the new company. He is set to hold the position of executive vice-chairman in the merged company, which will be listed in Paris, whereas Mr. Del Vecchio will become executive chairman.
The deal will rewrite the dynamics of the 90 billion euro eyewear industry, one of the fastest growing consumer sectors. The long-mooted will also create around 13,000 jobs.
The eyewear industry is highly driven by demographic shifts, especially in Asia. According to industry data, 63 percent of the world’s total population are in need of vision correction, but only 1.9 billion people have purchased glasses, contact lenses or surgery. More than 2.5 billion people are still in need, especially in Asia, Africa and Latin America.
On the other hand, sunglasses are becoming a ‘must have’ item for people to reduce the risk of potent sunlight or UV rays.