Luxottica, Essilor in 46 billion euro merger deal to create eyewear giant: Sources

[Decades]

Decades: tough question for you.

In this day and age, if you are a lab owner and "Essilux" waves 2 million dollars in your face, are you going to say no?

Are you going to pass on your business to the kids, when the giant predator can stamp them out by taking millions of customers off the "free" market via EyeMed?

That's a great question, and it's why I qualified my comment regarding families who've sold their labs to the manufacturers by also saying:
"And who can blame them for cashing in on, in many cases, generations of hard work and personal sacrifice?"

I in no way blame or judge those families. They in many cases devoted their entire lives, their kids lives, and their grandkids lives to their businesses. They deserve a pay day!

As for EyeMed, essilor already took that business away from independent labs, and some labs which survived that blow are even stronger today. I hope the same will hold true for independent optometrists and opticians who now face that challenge... perhaps they should seek out the nearest family owned and operated lab that is thriving in their local market, and ask them how they did (and are still doing) it.

[Lab Insight]

That's a great question, and it's why I qualified my comment regarding families who've sold their labs to the manufacturers by also saying:
"And who can blame them for cashing in on, in many cases, generations of hard work and personal sacrifice?"

I in no way blame or judge those families. They in many cases devoted their entire lives, their kids lives, and their grandkids lives to their businesses. They deserve a pay day!

Correct and agree; we all deserve a potential payout for our hard efforts. No other company out there is offering a comparable offer or mutual solution.

[LENNY]

Correct and agree; we all deserve a potential payout for our hard efforts. No other company out there is offering a comparable offer or mutual solution.

Thats why I love when people scream to only support independents! They are independent only before they beingsold! I always pick the best deal out there!

[Chris Ryser]

Thank you Shanbaum. your comments are well appreciated .

[Chris Ryser]

After years of speculation, Essilor has agreed deal withLuxottica that will see the two behemoths work as one. Simon Jones looks at theterms of the deal what it might mean for optics around the world


Author:Simon Jones
Published:20/01/2017

January 16, 2017, will go down in the annalsof optical history as its Brexit, or even Trump moment. The €46bn mergerbetween Essilor and Delfin, the group controlling Luxottica, will change the landscape of the global optics sector forever.

Themerger, which will see EssilorLuxottica control more than 25% of the global spectacle and contact lens market. According to 2015 data from Euromonitor,single entity companies, Johnson & Johnson, Safilo and Hoya control just 3.9%, 3.7% and 3.2% of the market, respectively. The remaining 62% comprises all other businesses. Together, Essilor and Luxottica have annual revenue of €15bn from their operations in 150 countries with 140,000 staff. They have alsobeen clear market leaders since 2010 with eyewear sector sales growth more thandouble that of the likes of Zeiss, Safilo, Novartis and Hoya.
Ina joint statement, the companies said the newly formed group would be a better position to seize opportunities in an eyewear market where there was strong demand from an increasing need for corrective eyewear and an equally strong appetite for brands.


The deal will make Luxottica’s founder,Leonardo Del Vecchio (pictured left), the largest single shareholder in the combined company, with an approximate 30% stake. He will also serve as executive chairman and CEO of the new company. Delfin will then own between 31%and 38% of the shares of EssilorLuxottica and would be its largest shareholder.A 16-strong board of directors will be created, made up of eight members from each company.

HubertSagnières, chairman and CEO of Essilor said: ‘Our project has one simple motivation: to better respond to the needs of an immense global population invision correction and vision protection by bringing together two great companies, one dedicated to lenses and the other to frames.

Hubert Sagnières, chairman and CEO of Essilor Said:

‘Our project has one simple motivation: to better respond to the needs ofan immense global population in vision correction and vision protection bybringing together two great companies, one dedicated to lenses and the other two frames.


With extraordinary success, Luxottica hasbuilt prestigious brands, backed by an industry state-of-the-art supply chain and distribution network. Essilor brings 168 years of innovation and industrial excellence in the design, manufacturing and distribution of ophthalmic and sunlenses. By joining forces today, these two international players can nowaccelerate their global expansion to the benefit of customers, employees andshareholders as well as the industry as a whole.’

The news will come as little surprise for most, as ‘who would buy who’ has been the subject of many rumours in recent years. In 2014, the companies admitted that discussions had taken place about a merger but were later shelved. Recently, however, the two companies had appeared to heading in the same direction and adeal between the two had started to look unlikely. Luxottica has moved intoprescription lens manufacturing with a new plant for Ray-Ban in Agordo, while Essilor’s expansion into online spectacle lens retailing has been well documented.The deal has defused the risk of growing competition between the two.


Essilor has not been the only potential lens manufacturer mooted to join forces with Luxottica. Carl Zeiss was the subject of merger speculation in 2016 after the nature of the growing working relationship was detailed in an investor analyst presentation in March that year.



The dynamic of the Zeiss relationship is justone that will be under the microscope in the coming months. In Australia,Luxottica’s 2003, $550m investment in the OPSM retail chain has been locked inbattle with Specsavers. According to a report in The Austrailian, OPSM hasaround 35% market share in the country, compared to Specsavers’ 20%. As aresult of the deal Essilor will now supply Specsavers.


Dreamland


Onthe merger, Leonardo Del Vecchio, chairman of Delfin and executive chairman of Luxottica Group said: ‘With this agreement my dream to create a major global player in the eyewear industry, fully integrated and excellent in all its parts, comes finally true. It was some time now that we knew that this was the right solution but only today are there the right conditions to make itpossible. The marriage between two key companies in their sectors will bringgreat benefits to the market, for employees and mainly for all our consumers.Finally, after 50 years, two products which are naturally complementary, namelyframes and lenses, will be designed, manufactured and distributed under thesame roof.’

The agreement will settle the nerves of those worried about succession planning at the top of Luxottica. The past three years have been turbulent atboard level within the company, with a revolving door of CEOs and trials ofdifferent structures. Del Vecchio stepped back into the breach two years ago tostabilise things at the top, but the merger will further boost confidence now that Sagnières represents a solid leader for the future.


With the ink barely dry on the contract, it isstill very early to assess the full impact of the merger on optics andimportantly, independent practices here in the UK. Many, including P&A Eyecarein Crief, Scotland, have already stoppedworking with the companies, but are concerned about the potential monopolybeing created. ‘I made the decision to stop working with Luxottica and Essilorsome years ago. My main frustration with both is the way in which they try to“befriend” the independent practice owner and convince us that we need theirproduct in our practice, while at the same time both companies are sellingdirect to consumers through optical stores, department stores and online websites.


‘Theystopped becoming a supplier and became competition. Their merger is further evidence of a monopoly in our industry and I would encourage any practice ownerto explore independent alternatives,’ said director James Michael.


TDTom Davies CEO Tom Davies also raised the issue of too much control over the sector. ‘Both already dance around anti-competition rulings, it will be interesting to see how they get around them,’ he said.


However, Davies was optimistic about theopportunities: ‘With the combined retail and online presence, they are going tochange the industry as we know it and this will present opportunities for niche service-led opticians and it will hurt the multiples and smaller online companies.’
Specsavers co-founder Doug Perkins was morepensive: ‘It’s a colossal control of the market on a global basis – who knows what the end game is? Essilor has made significant investments in automationand the internet, which is going to be significant.


‘Inthe UKat the moment it will have an effect on the supply chain more than high streetretail. The line where manufacturers were different from retailers has gone.’


Timeline


1849 Paris Paris-based spectacle-frame makers take the name ofSociété des Lunetiers (SL)


1899 SLSL comprises three lens factories and four that makeframes


1927 SLSL starts selling corrective lenses


1959 VariluxVarilux progressive lens is born


1961 LeonardoLeonardo Del Vecchio establishes Luxottica


1971 First Luxottica eyewear collection presented at MIDO


1972 Essilor Group formed through merger of two leading opticalgroups


1975 Essilor listed on French stock market


1979 Essilor expands to Asiawith manufactur


1981 Luxottica begins global expansion with German subsidiary


1986 Essilor of America formed, headquartered in Dallas, Texas


1988 Luxottica opens licence portfolio with GiorgioArmani deal


1990 Luxottica lists on the New York Stock Exchange


1991 Essilor joint venture results in world’s firstphotochromic lens Transitions



1992Essilor brings Crizal lens to market

1993 Varilux Comfort progressive lens launched

1995 Luxottica enters retail with acquisition of LensCrafters, Persol acquired

1999 Ray-Ban acquired by Luxottica

2001 Luxottica announces the acquisition of Sunglass Hut chain

2003 Luxottica confirms licence agreements for Versace, Prada brands

2007 Luxottica acquires California-based sunglass giant Oakley

2009 Essilor makes first online acquisition with Framesdirect.com. The same year, Essilor launches Mr Blue

2010 Essilor acquires Shamir Optical and Signet Armorlite

2013 Luxottica acquires Alain Mikli International. Essilor launches Crizal Prevencia to protect against harmful blue-violet and UV light

2014 Luxottica acquires glasses.com. Essilor acquires 100% of Transitions Optical

2017 Essilor-Luxottica merger announced, worth reported $50bn




source : ==============>

https://www.opticianonline.net/featu...uxottica-unite

[Chris Ryser]

A continental merger between Luxottica and Essilor fits a pattern
January 19, 2017

Italian business leaders fret about French firms plucking control of local firms

IT MAY be an exaggeration to talk of French firms “colonising”corporate Italy.Some Italian business leaders nonetheless fret about expansionists from across the northern border plucking control of some of their most celebrated local firms. Family-run companies, especially, can make tempting prospects: ones that make excellent products but struggle to grow, or that face agonising succession problems, are notably juicy targets.


Thelatest example, announced this week, is the merger between Luxottica, an Italian Maker of fancy specs, and Essilor, a spiffy French producer of lenses. Together They will produce an entity with a market value of at least €46bn ($49bn),140,000 staff and annual revenues of €15bn. The deal, one of the largest cross-border tie-ups attempted by European firms, had long been expected byindustry watchers. The idea is to produce an entity that combines Italian style and skills in marketing with deft French engineering.


The new firm will be listed on the Paris bourse (as probably its eighth-largest firm) later this year. That will mark the culmination of a long campaign by Essilor to arrange a merger. The founder and owner of Luxottica, Leonardo DelVecchio, now 81 years old, had long resisted. But he now gushes that “two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof.”


His change of heart may stem from the problem of arranging for successor. The company he founded in 1961 is widely lauded and owns global brands such as Ray Ban, Oakley and Sunglass Hut. Mr Del Vecchio himself rosefrom poverty (he spent some of his childhood in an orphanage) to become Italy’s Second-richest man, worth some €20bn. Yet for all his strengths, he could not foster a strong alternative leader and would not let any of his children (from various marriages) become managers. Colleagues felt squeezed out, seeing theboss as reluctant to delegate. One ex-employee says “90% of top management”abandoned the company in recent years.


The deal with Essilor is thus a way out, evenif Mr Del Vecchio is not stepping down yet. Through his family trust, Delfin,he will be the largest shareholder in the merged entity (potentially with 38%of it) and its “executive chairman and chief executive” for the next few years.But Essilor’s boss, Hubert Sagnières, who is 61 and will share equal managerial duties of the new entity, looks well placed to take charge once Mr Del Vecchio Retires.


Building a bigger company looks possible. Somesavings will come from knitting two teams of managers together. The global eyewear market, already worth some €90bn, is alluring. It is expected to grow as cohorts of middle-class consumers in Asia,especially, find they need eyesight correction and develop a liking for specs as accessories or protection against ultraviolet rays.


An amicable merger hardly ranks as a French assault on Italy. But itdoes come in the context of other Franco-Italian tie-ups. In luxury goods, forexample, French conglomerates with deep pockets, notably LVMH and Kering, have been acquiring smaller Italian rivals for years. French firms first grew faster by attending to flourishing markets for accessories such as handbags. Then they paid handsomely to take over prominent Italian brands, including Gucci, Bulgari And Fendi.


TheFrench are active in other sectors, too. Vincent Bolloré, a swaggering billionaire who is determined to grow in Italy, last year led his firm,Vivendi, to buy nearly a quarter of Telecom Italia. (Unconfirmed rumours say hemight sell to another French operator, Orange.)The daring Frenchman is also pushing Vivendi in a second bold bid, for Mediaset, a company in which Silvio Berlusconi, a former Italian prime minister, and his family are the biggest owners. Vivendi now owns nearly 29% of Mediaset.



In Retailing, too, a pair of French supermarket chains, Auchan and Carrefour,together operate more than 2,000 supermarkets in Italy’s unusually fragmented industry. Given that many businesses in Italy are run by ageing,first-generation founders with no clear plan for succession, more targets are bound to attract buyers from its neighbour to the north.


Source:===========è


http://www.economist.com/news/busine...makers-eyewear

[drk]

Thank you Shanbaum. your comments are well appreciated .

Hear,hear.

[drk]

Chris, what do you think of this?

"The era of the family-run business is over. Mega-capitalized publicly-owned corporations buy out traditional, tender-loving-care-businesses that would normally have gone to the next generation, and run them with a cold-hearted profit motive."

I made that up all by myself.

I think it's true.

The problem is almost no one can raise a good kid, anymore.

[Lori]

"The era of the family-run business is over. Mega-capitalized publicly-own corporations buy out traditional, tender-loving-care-businesses that would normally have gone to the next generation, and run them with a cold-hearted profit motive."

I made that up all by myself.

I think it's true.

The problem is almost no one can raise a good kid, anymore.

There's truth to your statement. The tragic possibility is that as more corporates gobble up family owned businesses (in all categories), the younger generation won't experience the quality and care provided by independents and thereby won't recognize the benefits. I do however have hope that people will tire of corporations and support independents. The pendulum swings and eventually settles down somewhere in the middle.

[Lelarep]

...The problem is almost no one can raise a good kid, anymore.

The question then becomes, who has the lions share of the blame regarding that?

[Chris Ryser]

The question then becomes, who has the lions share of the blame regarding that?

Technology of the last few years.

I a world where nobody can walk around around anymore, without a computerized cell phone with access to anything you want and desire, the world has totally changed.

Two years ago driving through the PA mountains on HWy 81 it was snowing and I reduced speed to 40 mph.

Three cars passed us at at least 60 mph and each of the drivers was texting. About 10 miles later all three were lying
in the ditch, upside down

[Chris Ryser]

drk......................you are totally correct.........I agree fully

[Chris Ryser]

Leonardo Del Vecchio, the far-sighted dealmaker of Milan

January 20, 2017

In 2014 Italy’s richest man determined it was time to take again management of the firm he had began 50 years earlier inthe foothills of the Dolomites. The billionaire founder of Luxottica — by now the world’s greatest eyewear maker and the identify behind
manufacturer Ray-Ban and Oakley — introduced he was able to do offers after a decade’s absence. Corporate governance specialists have been aghast.

But this week Leonardo Del Vecchio, 81,confounded his critics. In a deal typical of the boldness behind his inconceivable rise from orphanage boy to the most lionised of Italy’s entrepreneurs — main a pack that features Giorgio Armani and Silvio Berlusconi — he agreed to merge Luxottica With France’s Essilor, the world’s largest lens producer.

The Deal will create a world enterprise with a market worth of about €50bn, mixed gross sales of €15bn, 140,000 staff in additional than 150 international locations and a 15 per cent market share of the €90bn eyewear and visible wellbeing trade. It will dwarf its nearest international competitor, elevating the prospect of antitrust issues amongst regulators.

Mr Del Vecchio turns into govt chairman and the largest shareholder in the merged Essilor* Luxottica, with 31 per cent of voting rights. Hubert Sagnières, 61, Essilor’s boss, turns into govt vice-chairman.
“We have the model. What was lacking was the high quality of the lenses,” Mr Del Vecchio mentioned with customary bluntness. Shares in Essilor jumped greater than 10 per cent on the information. Luxottica shares jumped eight per cent.

Friday, 20 January, 2017

“Del Vecchio is a formidable dealmaker,” says Alberto Nagel, chief govt of Italy’s Mediobanca, adviser to the holding firm of the founder’s household — a sprawling dynasty comprising six kids from three marriages.

The new group is at the centre of a fast-growing international market. Of the world’s 7.3bn individuals, greater than 60 per cent are thought of to have want of imaginative and prescient correction, however just one.9bn put on glasses or contact lenses or have had surgical procedure. More than 2.5bn are nonetheless in want, largely in Asia, Africa and Latin America, in keeping with Euromonitor.

The dangers of solar injury from extremely*violet radiation from the environment and blue gentle from computer systems and smartphones are pushing sun shades from a “good to have” to “will need to have” amongst rising center lessons.
Meanwhile, eyewear has grow to be necessary for a luxurious items trade looking for new income streams. Luxottica already manufactures for trend manufacturers together with Chanel, Armani, Prada and Burberry. The merged group shall be listed in Paris, alongside Louis Vuitton Moët Hennessy and Gucci proprietor Kering.


Mr Del Vecchio noticed the alternatives in themarket early. His father died 5 months earlier than his start in Milan in 1935 and — struggling to help him and his three siblings — his widowed mom despatched him to an orphanage when he was simply seven years previous. He labouredas an apprentice at a software manufacturing unit in Milan earlier than specializing in makingelements for spectacles. In 1961, he based Luxottica as a contract producer primarily based in the mountain city of Agordo,the place the firm nonetheless has a manufacturing unit.
Work at all times got here at the beginning,”he as soon as mentioned. “If I’d began promoting fruit, I’d be enthusiastic about fruit”.

In1988 the group signed its first licensing take care of Giorgio Armani, the Italian trend model. Two years later Luxottica listed in New York. Media-shy and taciturn, Mr DelVecchio pulled this off regardless of talking no English. By 2000, there was a list in Milan,adopted by audacious acquisitions of the group’s finest recognized manufacturers, together with Sunglass Hut and Ray-Ban.

As he entered his eighth decade, Mr Del Vecchio handed over in 2004 to Andrea Guerra. The entrepreneur was applauded for saying he wished educated professionals to take over the firm, avoiding the acquainted entice of intergenerational strife. Mr Guerra greater than doubled revenues to €7.3bn throughout his decade at the helm earlier than quitting, sad about Mr Del Vecchio’s return. The founder, in the meantime — whose eldest son, Claudio, owns preppy US retailer Brooks Brothers — maintained he wouldn’t be succeeded by a relative.

But his return to day-to-day administration led to instability, with three chief executives leaving in as a few years. Luxottica’s share worth fell by 1 / 4 in the first 10 months of 2016.


Friday, 20 January, 2017

The take care of Essilor caps this tumultuous interval. Mr Del Vecchio had toyed with the concept of a return for years. He was lastly satisfied by the demise in September 2016 of his up to date, Bernardo Caprotti, the billionaire founder of Italian market chain Esselunga, say individuals concerned with the deal. A messy tug of conflict amongst Capriotti’s kids gave Mr Del Vecchio the resolve to safe his legacy and succession. In Mr Sagnières, 20 years his junior, Mr Del Vecchio finds a prepared inheritor.

In a flurry of calls between Monte Carlo, the place Mr Del Vecchio spends a lot of his time, the Caribbean, Sri Lanka and Verbier, the place the numerous events have been holidaying over Christmas, the deal was struck — chaperoned by two of Europe’s most skilled dealmakers, Luigi de Vecchi, chairman of Citi in the area, and Olivier Pécoux, co-chief govt of Rothschild & Co.

It was Mr Del Vecchio’s newest innovation. Defying his impoverished beginnings, he had struck the largest cross-border transaction primarily based on mixed market worth ever in continental Europe, securing his legacy.


Source: Financial Times

[eyefly4u]

st an FYI for all you independent Opticians and Optometrists.
If you are still using anything Essilor or Luxottica then you are supporting the competition.
This merger is not a win for consumers or the optical industry as it will just drive up pricing.
These two corporations have always talked out of both sides of their mouth claiming to support small business optical. (JUST CALL THE EYEMED CUSTOMER SUPPORT LINE AND LISTEN TO THE COMMERCIAL TO GET YOUR GLASSES ONLINE) Nothing can be further from the truth and I always knew this!!
There is enough better lens and frame products in the market.
Lets be smart.

[Chris Ryser]

In all the years I have been posting on OptiBoard I have never seen such a big interest in one subject, like this one.

I guess it is all in our interest to get the latest big news in the optical field in every detail possible, because it will affect all of us.

[Lab Insight]

In all the years I have been posting on OptiBoard I have never seen such a big interest in one subject, like this one.

I guess it is all in our interest to get the latest big news in the optical field in every detail possible, because it will affect all of us.

The shareholders certainly love the news with an instant 10% gain.

[Speed]

Yes. Lets blame the labs. But what will we tell our patients when they find out we are buying their lenses from lenscrafters?

[Chris Ryser]

INTERNATIONAL TRADER - EUROPE


Luxottica, Essilor Merger Will Create Global Powerhouse


Deal between Italian frame maker andFrench lens maker should have plenty of upside for investors


French optical lens manufacturer EssilorInternational and Italian frame maker Luxottica Group announced plans for a $50billion merger last week, marking one of Europe’s biggest cross-border dealsand creating an eyewear business that promises to generate plenty of upside forinvestors.
The tie-up wasremarkably well-received, considering that it’s both large andinternational—factors that usually signal potential execution risks. On Monday,when it was announced, both companies’ stocks soared. Essilor (ticker: EI.France) ended up 12%,while Luxottica (LUX.Italy) gained more than 8%. Bothcorporations have New York–traded shares. Essilor’s change hands under thesymbol ESLOY; Luxottica’s, under LUX.


Thegood start was testament to the clear strategic logic behind the idea ofcreating a combined new business named EssilorLuxottica. Both companies areleaders in their fields. And with one making the lenses and the other theframes, there’s very little overlap.


Says Sean Thorpe, international portfoliomanager at Aristotle Capital Management: “We have always admired theoutstanding collection of brands at Luxottica, which include Ray-Ban, Persol,and Oakley, just to name a few. These brands, combined with Essilor’stechnological leadership in lens manufacturing, will create a global powerhousein the 100 billion euro [$107 billion] eyewear industry. The potential revenueand cost synergies, combined with already attractive margins and returns, will,in our opinion, create a high-quality company which is very well-positioned inan exciting industry.”

Essilor has brand names of its own, includingCrizal, Transitions, and Varilux.

THE ALL-SHARE TRANSACTION, which will face antitrust scrutiny, will see Luxottica founder and Executive Chairman Leonardo Del Vecchio’s Delfin holding company swap its 62% of the Italian company for 31% to 38% of the new business, making it EssilorLuxottica’s biggest single shareholder. Delfin’s voting rights will be capped at 31%.
The exchange ratio of 0.461 of an Essilor share for one of Luxottica’s represents a roughly 5% discount to the Italian outfit’s closing price before the merger plan was disclosed, says Bryan Garnier analyst Cédric Rossi. Calling it “a game changer within the eyewear industry,” he describes it as a perfect fit in categories and distribution channels.


Del Vecchio and Essilor CEO Hubert Sagnières plan to share power equally at the head of EssilorLuxottica, with a 16-member board divided evenly between the two sides. This may allay succession fears that weighed on Luxottica’s stock in 2014, amid reports that the now 81-year-old Del Vecchio had clashed with some of his top aides, seeing off two CEOs in less than two months.


The companies estimate that the combined business will generate €3.5 billion in annual earnings before interest, taxes, depreciation, and amortization, on more than €15 billion in revenue. Essilor and Luxottica both currently sport price/earnings ratios around 30, based on expected 2017 profits.
UBS analysts reckon that 37% of the new company’s sales will come from lenses, 35% from retail sales, 27% from wholesale sales, sunglasses, and reading glasses, and 1% from equipment. UBS analyst Nicolas Langlet has Essilor as a Buy, with a €130 price target. His colleague Fred Speirs rates Luxottica at Neutral, with a €45 price target, down sharply from its recent levels. The stocks closed at €110.25 and €51.25, respectively, Friday.

Del Vecchio and Essilor CEO Hubert Sagnièresplan to share power equally at the head of EssilorLuxottica, with a 16-member board divided evenly between the two sides. This may allay succession fearsthat weighed on Luxottica’s stock in 2014, amid reports that the now81-year-old Del Vecchio had clashed with some of his top aides, seeing off twoCEOs in less than two months.
The companies estimate that the combined business will generate €3.5 billion in annual earnings before interest, taxes,depreciation, and amortization, on more than €15 billion in revenue. Essilorand Luxottica both currently sport price/earnings ratios around 30, based onexpected 2017 profits.
UBS analysts reckon that 37% of the new company’s sales will come from lenses, 35%from retail sales, 27% from wholesale sales, sunglasses, and reading glasses,and 1% from equipment. UBS analyst Nicolas Langlet has Essilor as a Buy, with a€130 price target. His colleague Fred Speirs rates Luxottica at Neutral, with a€45 price target, down sharply from its recent levels. The stocks closed at€110.25 and €51.25, respectively, Friday.


whichwill face antitrust scrutiny, will see Luxottica founder and Executive Chairman Leonardo Del Vecchio’s Delfin holding company swap its 62% of the Italiancompany for 31% to 38% of the new business, making it EssilorLuxottica’sbiggest single shareholder. Delfin’s voting rights will be capped at 31%.
Theexchange ratio of 0.461 of an Essilor share for one of Luxottica’s represents aroughly 5% discount to the Italian outfit’s closing price before the mergerplan was disclosed, says Bryan Garnier analyst Cédric Rossi. Calling it “a gamechanger within the eyewear industry,” he describes it as a perfect fit incategories and distribution channels.

THE ALL-SHARE RANSACTION, which will face antitrust scrutiny, will see Luxottica founder and Executive Chairman Leonardo Del Vecchio’s Delfin holding company swap its 62% of the Italian company for 31% to 38% of the new business, making it EssilorLuxottica’s biggest single shareholder. Delfin’s voting rights will be capped at 31%.
The exchange ratio of 0.461 of an Essilor share for one of Luxottica’s represents a roughly 5% discount to the Italian outfit’s closing price before the merger plan was disclosed, says Bryan Garnier analyst Cédric Rossi. Calling it “a game changer within the eyewear industry,” he describes it as a perfect fit in categories and distribution channels.


DelVecchio and Essilor CEO Hubert Sagnières plan to share power equally at thehead of EssilorLuxottica, with a 16-member board divided evenly between the twosides. This may allay succession fears that weighed on Luxottica’s stock in2014, amid reports that the now 81-year-old Del Vecchio had clashed with someof his top aides, seeing off two CEOs in less than two months.


Del Vecchio and Essilor CEO Hubert Sagnièresplan to share power equally at the head of EssilorLuxottica, with a 16-memberboard divided evenly between the two sides. This may allay succession fearsthat weighed on Luxottica’s stock in 2014, amid reports that the now81-year-old Del Vecchio had clashed with some of his top aides, seeing off twoCEOs in less than two months.

The companies estimate that the combinedbusiness will generate €3.5 billion in annual earnings before interest, taxes,depreciation, and amortization, on more than €15 billion in revenue. Essilorand Luxottica both currently sport price/earnings ratios around 30, based onexpected 2017 profits.



UBS analysts reckon that 37% of the new company’s sales will come from lenses, 35% from retail sales, 27% from wholesale sales, sunglasses, and reading glasses, and 1% from equipment. UBS analyst Nicolas Langlet has Essilor as a Buy, with a €130 price target. His colleague Fred Speirs rates Luxottica at Neutral, with a €45 price target, down sharply from its recent levels. The stocks closed at €110.25 and €51.25, respectively, Friday.

Source: ============è
http://www.barrons.com/articles/luxo...use-1484977028

[Chris Ryser]

Essilor had to back off, by some reason or another, after an antitrust scrutiny from a takeover of Rodenstock just about a year ago.

Here are the details as published in a German Newspaper and translated by Google:


Google Translation from German Newspaper


Optical Company Rodenstock gets new owner
German middle class news Published: 09.12.15, 18:03

THE OWNER OF RODENSTOCK, THE COMPANY WILL CONTINUE TO AN AMERICAN-BRITISH INVESTMENT COMPANY.
THE GLASS MANUFACTURER HAS RECEIVED FROM HIS DEVELOPMENT, EVEN AFTER TAX, RODENSTOCK - UNUSUAL FOR A COMPANY IN THE HANDS OF FINANCIAL INVESTORS - IS A "CLEARLY POSITIVE" RESULT.


The glasses manufacturer Rodenstock gets a new owner. The financial investor Bridgepoint handed the Munich-based company a package with some small participations to the American-British investment company Compass Partners, as two persons familiar with the transaction Reuters on Wednesday said. Compass will clearly account for more than 50 per cent, while Bridgepoint remains committed with a small share of Rodenstock. The traditional company with 4500 employees has recovered from its deep crisis in recent years. For the current year Rodenstock is targeting a record turnover of 421 million euros, which is 3.5 per cent more than a year before. The operating profit will rise to 84 (2014: 82) million euros.

Even after tax, Rodenstock expects a "clearly positive"
result - unusual for a company in the hands of financial
investors. CEO Oliver Castalio hopes to grow with the new owner on further opportunities - also by acquisitions.
"Now a new phase in our development is starting," he said.Currently, the German competitor Eschenbach Optik is for sale.

Rodenstock himself only confirmed that Bridgepoint had
taken Compass as another shareholder on board. The
Compass, which specializes in the acquisition of entire
equity portfolios, said that they had acquired "certain
holdings" from Bridgepoint for a total of 360 million
pounds (almost 500 million euros) without mentioning
names. They would continue to be supported by Bridgepoint.

Bridgepoint had to get rid of the companies because the
fund expired, with which their takeover was financed. By joining Compass Partners, Bridgepoint is able to pass
over 430 million euros to its own fund investors, said
one of the insiders. In 2007, shortly before the financial crisis, Bridgepoint had paid a total of 700 million euros for Rodenstock alone. The company, however, came into a deep crisis a short time later, scraping past the bankruptcy.

Google Translate
ttps://translate.google.ca/

[Chris Ryser]

Just for the record, this thread has been fed and posted by information received from all sides, by e-mail, from many sources, that have helped me to publish the optical news story of 2017, at the beginning of the year, in sections as they came up, over the last few days.

Luxottica, Essilor in 46 billion euro merger deal to create eyewear giant: Sources

Started by Chris Ryser, 01-15-2017 11:32
PM 12345


· Replies:118
· Views: 6,321


today's date: 01-22-2017, 04:32 AM

[drk]

drk......................you are totally correct.........I agree fully

You have a broad perspective. If you agree, I believe it all the more.

[Chris Ryser]

Chris, what do you think of this?

"The era of the family-run business is over. Mega-capitalized publicly-owned corporations buy out traditional, tender-loving-care-businesses that would normally have gone to the next generation, and run them with a cold-hearted profit motive."

I made that up all by myself.

I think it's true.

The problem is almost no one can raise a good kid, anymore.

You have a broad perspective. If you agree, I believe it all the more.

That is what the large, worldwide corporations desire, want, work hard to, and try to achieve in every field.

Best active and successful example are the existing large oil corporations that have eliminated their family run distributors,
the mechanical shop with gas pumps, that were listed under the title gas stations.

Between my home and the office, a 5 to 8 minute drive there used to be five of them, just a few years back, and there is one left with four pumps.
The rest has been replaced by ten pump stations and a mini super market, mostly leased to immigrants from the far east.

The same trend is happening actively now also all over Europe, just in the beginning stage as the American Continent has been the testing ground.

Many or most of the corporations acquired optical labs over the last few years have silently been moved to the far east and Mexico, and still keep their address, and are run with a phantom staff, I have been told.

"The era of the family-run business is over. Mega-capitalized publicly-owned corporations buy out traditional, tender-loving-care-businesses that would normally have gone to the next generation, and run them with a cold-hearted profit motive."

Above statement might be right as all the signs are indicating towards that trend.

Specially if you want to defend the status quo, by defending the personalized service given by the optical retailer.

Do not forget there are over one thousand existing stores in the LC chain between the USA and Canada that can be nominated, and most probably will be, as the new service stations of their to be extended chain of on line opticals.

Jan 17, 2017 7:55am

While Asia and Latin America are seen by the companies as potential growth markets, e-commerce will also be a top priority.

So drk, you kind of said it very clearly and you are most probably right, as I can see it.

We can spin this thread to death with all the changes that are happening these days and more of them coming.

[Chris Ryser]

You have a broad perspective. If you agree, I believe it all the more.

drl..................I fully agree with you.

[Chris Ryser]

Leonardo Del Vecchio, the far-sighted dealmaker of Milan


January 20, 2017

In 2014 Italy’s richest man determined it was time to take again management of the firm he had began 50 years earlier in the foothills of the Dolomites. The billionaire founder of Luxottica — by now the world’s greatest eyewear maker and the identify behind manufacturers Ray-Ban and Oakley — introduced he was able to do offers after a decade’s absence. Corporate governance specialists have been aghast.

But this week Leonardo Del Vecchio, 81, confounded his critics. In a deal typical of the boldness behind his inconceivable rise from orphanage boy to the most lionised of Italy’s entrepreneurs — main a pack that features Giorgio Armani and Silvio Berlusconi — he agreed to merge Luxottica with France’s Essilor, the world’s largest lens producer.

The deal will create a world enterprise with a market worth of about €50bn, mixed gross sales of €15bn, 140,000 staff in additional than 150 international locations and a 15 per cent market share of the €90bn eyewear and visible well being trade. It will dwarf its nearest international competitor, elevating the prospect of antitrust issues amongst regulators.

Mr Del Vecchio turns into govt chairman and the largest shareholder in the merged Essilor* Luxottica, with 31 per cent of voting rights. Hubert Sagnières, 61, Essilor’s boss, turns into govt vice-chairman.

“We have the model. What was lacking was the high quality of the lenses,” Mr Del Vecchio mentioned with customary bluntness. Shares in Essilor jumped greater than 10 per cent on the information. Luxottica shares jumped eight per cent.
Friday, 20 January, 2017

“Del Vecchio is a formidable dealmaker,” says Alberto Nagel, chief govt of Italy’s Mediobanca, adviser to the holding firm of the founder’s household — a sprawling dynasty comprising six kids from three marriages.

The new group is at the centre of a fast-growing international market. Of the world’s 7.3bn individuals, greater than 60 per cent are thought of to have want of imaginative and prescient correction, however just one.9bn put on glasses or contact lenses or have had surgical procedure. More than 2.5bn are nonetheless in want, largely in Asia, Africa and Latin America, in keeping with Euromonitor.

The dangers of solar injury from extremely violet radiation from the environment and blue gentle from computer systems and smartphones are pushing sun shades from a “good to have” to “will need to have” amongst rising center lessons.

Meanwhile, eyewear has grow to be necessary for a luxurious items trade looking for new income streams. Luxottica already manufactures for trend manufacturers together with Chanel, Armani, Prada and Burberry. The merged group shall be listed in Paris, alongside Louis Vuitton Moët Hennessy and Gucci proprietor Kering.

Mr Del Vecchio noticed the alternatives in the market early. His father died 5 months earlier than his start in Milan in 1935 and — struggling to help him and his three siblings — his widowed mom despatched him to an orphanage when he was simply seven years previous. He labored as an apprentice at a software manufacturing unit in Milan earlier than specializing in making elements for spectacles. In 1961, he based Luxottica as a contract producer primarily based in the mountain city of Agordo, the place the firm nonetheless has a manufacturing unit.

“Work at all times got here at the beginning,” he as soon as mentioned. “If I’d began promoting fruit, I’d be enthusiastic about fruit”.

In 1988 the group signed its first licensing take care of Giorgio Armani, the Italian trend model. Two years later Luxottica listed in New York. Media-shy and taciturn, Mr Del Vecchio pulled this off regardless of talking no English. By 2000, there was a list in Milan, adopted by audacious acquisitions of the group’s finest recognized manufacturers, together with Sunglass Hut and Ray-Ban.

As he entered his eighth decade, Mr Del Vecchio handed over in 2004 to Andrea Guerra. The entrepreneur was applauded for saying he wished educated professionals to take over the firm, avoiding the acquainted entice of intergenerational strife. Mr Guerra greater than doubled revenues to €7.3bn throughout his decade at the helm earlier than quitting, sad about Mr Del Vecchio’s return. The founder, in the meantime — whose eldest son, Claudio, owns preppy US retailer Brooks Brothers — maintained he wouldn’t be succeeded by a relative.

But his return to day-to-day administration led to instability, with three chief executives leaving in as a few years. Luxottica’s share worth fell by 1 / 4 in the first 10 months of 2016.

Friday, 20 January, 2017

The take care of Essilor caps this tumultuous interval. Mr Del Vecchio had toyed with the concept of a return for years. He was lastly satisfied by the demise in September 2016 of his up to date, Bernardo Caprotti, the billionaire founder of Italian market chain Esselunga, say individuals concerned with the deal. A messy tug of conflict amongst Caprotti’s kids gave Mr Del Vecchio the resolve to safe his legacy and succession. In Mr Sagnières, 20 years his junior, Mr Del Vecchio finds a prepared inheritor.

In a flurry of calls between Monte Carlo, the place Mr Del Vecchio spends a lot of his time, the Caribbean, Sri Lanka and Verbier, the place the numerous events have been holidaying over Christmas, the deal was struck — chaperoned by two of Europe’s most skilled dealmakers, Luigi de Vecchi, chairman of Citi in the area, and Olivier Pécoux, co-chief govt of Rothschild & Co.

It was Mr Del Vecchio’s newest innovation. Defying his impoverished beginnings, he had struck the largest cross-border transaction primarily based on mixed market worth ever in continental Europe, securing his legacy.


source: =================>
http://newsonahand.com/leonardo-del-...maker-of-milan

[Chris Ryser]

No benign neglect of Luxottica-Essilor, CCI

January 23, 2017, 11:53 PM IST

When two European firms merge, should the Indian competition regulator take a view? It can and it could. Italy-based Luxottica, maker of Ray-Ban and other eyewear brands, has announced a merger with leading producer of lenses, France’s Essilor. The all-share merger would produce a €46 billion eyewear giant. While there is, as of now, no indication of abuse of its market dominance, which is what competition authorities worry about these days, rather than market dominance per se, there is potential for such an integrated player to act to the detriment of competitors.

Should this worry India’s competition authority? After all, the merger is taking place in faraway Europe and subject to the approval of Europe’s own beady-eyed watchdog. The simple point here is that such considerations about the national affiliation of companies and their regulatory oversight by the competent body of the relevant jurisdiction should not prevent the Competition Commission of India from examining such mergers for their impact on the Indian market.

In 2001, the European Competition Commission blocked the proposed merger of GE with Honeywell. Both are American companies and had approval from American regulators and from the regulators of 11other jurisdictions. Yet, Europe’s regulator assessed the merger to be not in Europe’s interest. Since Europe was too vital a market for GE or Honeywell to ignore, they abandoned the merger. India is slated to be one of the largest and fastest-growing consumer markets, including for eyewear. It is not a market anyone can ignore. It could well be that the proposed Luxottica-Essilor merger has no negative implication for India. But that should be established by CCI after a proper review, not assumed away at the outset.

This piece appeared as an editorial opinion in the print edition of The Economic Times.

source: ===========>
http://blogs.economictimes.indiatime...ca-essilor-cci