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

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

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

    1 Hour Ago Reuters

    Jean-Christophe Verhaegen | AFP | Getty Images
    Ophthalmic lenses on display in the laboratory of an Essilor factory.

    Italy's Luxottica and France's Essilor have agreed a 46-billion euro ($49 billion) merger deal to create a global powerhouse in the eyewear industry, two sources with knowledge of the matter said.

    The deal, one of Europe's largest cross-border tie-ups, is expected to be announced before the market opens on Monday. It brings together Luxottica, the world's top spectacles maker with brands such as Oakley and Ray Ban, with Essilor, the world's leading manufacturer of ophthalmic lenses.

    The deal will see Luxottica's 81-year old founder, Leonardo Del Vecchio, take a 31 percent stake in the merged group through his family holding Delfin, becoming the biggest shareholder in the company, one of the sources said.

    That source described the tie-up as a "merger of equals." Luxottica has a market value of around 24 billion euros, compared to Essilor's 22 billion euros, giving the merged group a combined market capitalization of 46 billion euros.

    The two companies' combined revenues totaled nearly 16 billion euros in 2015 and together they employed some 140,000 people.

    The second source said the merged group would be headquartered in Paris and listed on the Paris stock exchange.



    Europe earnings at inflection point: UBS Friday, 13 Jan 2017 | 4:07 AM ET | 02:25


    The fast-growing eyewear market was valued at around $100 billion in 2015, according to U.S.-based market consulting company Grand View Research. It is expected to keep expanding at a healthy pace in coming years because of an ageing population as well as increasing awareness about eye care and vision problems, with Latin America and Asia seen as key markets for growth.
    The Financial Times reported that Del Vecchio would become executive chairman of the merged group and Essilor's chairman and chief executive, Hubert Sagnieres, 60, will become executive vice-chairman.

    Luxottica has been dogged by management upheaval in recent years, raising questions over Del Vecchio's succession plans and strategy. Some insiders have said a merger could help settle such issues.

    Luxottica announced in January 2016 the departure of its third chief executive in 17 months when Adil Mehboob-Khan, a former Procter & Gamble executive, stepped down and Del Vecchio tightened his grip on the group by taking on executive powers.

    Long-standing CEO Andrea Guerra quit in 2014 following a rift with Del Vecchio. His successor, Enrico Cavatorta, left after only six weeks into the job, also because of differences with Del Vecchio.
    Through Delfin, Del Vecchio, who founded Luxottica in 1961, owns 62 percent of the group, which had revenues of 9 billion euros in 2015, according to Luxottica's website. Fashion designer Giorgio Armani has a 5 percent stake in the Italian group.

    Luxottica cut its full-year outlook in July, blaming uncertain markets, as global security threats cloud the outlook for tourism and consumer spending.

    The group said in September 2014 that a deal with Essilor had been explored about a year and a half earlier but was not pursued at the time because the right conditions were not in place.
    Back then, it cited shareholding governance issues among the reasons why the deal had not gone ahead. In March and April last year, Luxottica denied press reports of a possible tie-up with Essilor and Germany's Carl Zeiss, saying the only relationship it had with the two groups was that they both were among its suppliers.

    source: ===========>
    https://www.cnbc.com/2017/01/15/luxo...nt-source.html


    Last edited by Chris Ryser; 01-16-2017 at 12:25 AM.
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    Blue Jumper Now it is finally happening .........................................

    It was written in the stars already a few years back and is finally happening.

    The 2 together are out for total domination of the optical wholesale and retail market, which is the last stand that still contains most independent retail - optical owners.

    They will be a lot more active in every sector of the field, and work against protective regulations of the profession, politically and any other way, a global territory to eliminate the unwanted, and dominate the largest part of the eyeglass trade on every level.

    Once the whole deal is done and sealed we will see another tsunami of takeovers in the retail field and maybe even before then.

    This will affect everybody in the independent optical manufacturing, laboratory, wholesale and retail business, and will change the eyeglass scene forever, even more as it already has.


    January 2017 a date to remember.
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    Blue Jumper will create a company with about 130,000 employees, according to the FT report.......

    Monday, 16 January 2017 | MYT 11:59 AM


    Luxottica, Essilor agree to US $53bil merger,
    FT says


    MILAN: Luxottica Group SpA, the world’s largest maker of eyewear including Ray-Bans, has agreed to merge with French rival Essilor International SA, the Financial Times reported, creating a combined company with about US$16bil in revenue.

    Leonardo Del Vecchio, Luxottica’s founder, will become the single largest shareholder with a stake of about 30 percent, in a deal that values the combined companies at 50 billion euro (US$53bil), the newspaper reported, citing unidentified people with direct knowledge of the agreement.

    The deal creates a branded goods giant with a market value that rivals the second-biggest luxury maker Hermes International.

    Milan-based Luxottica, which also makes frames for luxury brands such as Armani, Chanel, and Prada, has a market value of about 24 billion euros as of Jan. 13, compared with about 22 billion euros for lens maker Essilor. Luxottica is also developing voice-activated glasses that coach cyclists and runners.


    “This is a merger where they will be able to complement each other and create economies of scale on the supply chain,” said Catherine Lim, a Bloomberg Intelligence analyst.

    “Luxottica is a licensee of major branded eye-wear while Essilor has been more focused on making lenses.”

    Luxottica increasingly competes with large luxury players such as Kering, in a global eyewear industry worth about US$121bil last year, according to data from Euromonitor.

    The company’s expansion into lenses is attractive amid rising consumer demand and as the segment offers high margins, according to Bloomberg Intelligence.

    A spokeswoman for Essilor, which is working on smart glasses as well, had no comment when reached outside business hours. Luxottica representatives could not be immediately reached for comment.

    Demand for eyewear is expanding in emerging markets with more than 2.3 billion people in Asia, Africa and Latin America needing optical frames, according to Exane BNP Paribas.

    The two companies have been on a “collision course,” Exane said in a note in October as Luxottica moves into lens manufacturing while Essilor advances into frames and acquires control of online eyewear retailers. Lens manufacturing will be a big deal for Luxottica as it makes it independent for sun and prescription lenses, it said.

    Luxottica announced last March it will seek to accelerate growth by investing more than 1.5 billion euros over three years.

    Del Vecchio, Luxottica’s chairman and Italy’s second-richest person, will be executive chairman of the merged company, while Essilor chairman and chief executive Hubert Sagnieres will become executive vice chairman, the FT reported.

    The deal, due to be announced before the market opens Monday, will create a company with about 130,000 employees, according to the FT report. - Bloomberg

    Source: ==============>
    http://www.thestar.com.my/business/b...merger-ft-says


    This is one of the biggest deals ever.


    What do you say?
    Chris Ryser
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    Blue Jumper Who has supported them on their climb up the mountain ? .............................

    Luxottica Group, the world’s largest eyewear maker, and France-based rival lens maker Essilor International agreed to merge, the Financial Times reported. Bloomberg's Dave McCombs has more on "Bloomberg Markets." (Source: Bloomberg)

    The two largest aggressive optical steamrollers are now becoming one giant one, out to control and dominate the optical world from manufacturing to the retail end in every detail.

    Who has supported them on their climb up the mountain ?
    We all have one way or the other.

    What do you say ?
    Chris Ryser
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    Not a surprise. I'm sure everyone saw this coming.

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    Quote Originally Posted by Chris Ryser View Post
    The two largest aggressive optical steamrollers are now becoming one giant one, out to control and dominate the optical world from manufacturing to the retail end in every detail.

    Who has supported them on their climb up the mountain ?
    We all have one way or the other.

    What do you say ?
    IMHO, it is simply pure vertical integration while eliminating the middle layer of independents. If there were ever a time for IND ECP's to be concerned about their long term survival, this is it. Supply chain Co-operative ownership has never sounded so good.

    But to be honest, I think there will first be a turf war to eliminate the likes of their largest remaining competitors such as Marchon, Safilo, Hoya etc. before shifting their focus on the vulnerable ECP's.

    In the meantime, it will be interesting to watch how Hoya and company try to spin this in their favor like they are the ECP's best friend in the marketplace to gain sales. These companies are no different given the circumstances and is all about market control these days.

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    Unholy crap.

    This is probably the biggest thing in optical history.

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    Quote Originally Posted by drk View Post
    Unholy crap.

    This is probably the biggest thing in optical history.
    Yup.
    I'm Andrew Hamm and I approve this message.

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    Quote Originally Posted by drk View Post
    Unholy crap.

    This is probably the biggest thing in optical history.
    and it's not a good thing.

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    Hold me.

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    Quote Originally Posted by drk View Post
    Hold me.
    Shh. It's okay. Don't fight it.
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    Ok, let's clear our heads.

    What will this allow essilux to do, that they haven't done before?

    The only thing I can think of, at this point, is that the essilux retailers can have the lowest possible COGS.

    As long as they stay "premium" at their brick and mortars, then we will be OK.

    But they have the power to squeeze the price point as low as they want to go, and that's what is dangerous. But it's unlikely that they are interested in stealing the crumbs from the moms and pops.

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    I think the big brick-crappers right now would be VSP. A substantial amount of vision care in the U.S. market, at least, funnels through these pre-paid plans.

    This cannot be good for VSP. I wouldn't be surprised to see them "de-list" essilor products, now, or even Luxottica products.

    That would be a problem.

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    As to the rest of the world, I have no idea.

    Anyone have a global perspective? Is there even a shred of free enterprise in vision care in, say, Europe?

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    Blue Jumper You better start wearing your OSB, drk

    Quote Originally Posted by drk View Post

    Unholy crap.

    This is probably the biggest thing in optical history.



    yes........................................drk


    You better start wearing your OSB (Optometric Seat Belt) at all times from now on.
    Chris Ryser
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    Blue Jumper in the near future Lenscrafters with their over 1,000 stores will service on-line...

    Quote Originally Posted by drk View Post

    I think the big brick-crappers right now would be VSP. A substantial amount of vision care in the U.S. market, at least, funnels through these pre-paid plans.

    This cannot be good for VSP. I wouldn't be surprised to see them "de-list" essilor products, now, or even Luxottica products.

    That would be a problem.

    As far as I know, is that Luxottica is als owner of some vision insurance companies.

    Furthermore do not forget that in the near future Lenscrafters with their over 1,000 stores will service on-line purchased eyeglasses for no or with a fee.

    They will also be the sole owners of the most on-line optical on the globe.
    Chris Ryser
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    One eye sees, the other feels. OptiBoard Gold Supporter
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    Quote Originally Posted by drk View Post
    As to the rest of the world, I have no idea.

    Anyone have a global perspective? Is there even a shred of free enterprise in vision care in, say, Europe?
    "More than half of revenue at the combined company would come from the United States, while Europe would account for about 22 percent and 18 percent would come from Africa, Asia and the Middle East."

    https://www.nytimes.com/2017/01/16/b...rger.html?_r=0
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    Blue Jumper .............and yes they will be stealing the crumbs from everybody,

    Quote Originally Posted by drk View Post

    Ok, let's clear our heads.

    What will this allow essilux to do, that they haven't done before?

    But they have the power to squeeze the price point as low as they want to go, and that's what is dangerous.
    But it's unlikely that they are interested in stealing the crumbs from the moms and pops.


    It is not essilux ..........................................it is, or will be " Sources"


    .............and yes they will be stealing the crumbs from everybody, including moms and pops,
    Chris Ryser
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    What's up? drk's Avatar
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    I don't know what the situation is like in Europe. But I'm sure that will portend what could happen here.

    I would like to know how it works over there.

    Are there just ophthalmologists writing Rxs and giant vertical optical corporations filling them? I'm sure Lux has eaten all the competition over there as well.

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    Blue Jumper NewYork Times seems to be off again ....................

    Quote Originally Posted by Robert Martellaro View Post

    "More than half of revenue at the combined company would come from the United States, while Europe would account for about 22 percent and 18 percent would come from Africa, Asia and the Middle East."

    https://www.nytimes.com/2017/01/16/b...rger.html?_r=0


    NewYork Times seems to be off again ...........................................Essilor right now is already dominating in the most populated country of INDIA.
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    Time to toot my own horn. We are an INDEPENDENT supplier of finished lenses and supplies and the FastGrind in office lens processing system.
    I think someone needs to make a list of the Companies owned by Essilor and Luxottica and probably a list that are not and try to support the "are nots". Actions speak louder than words.

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    What's up? drk's Avatar
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    "Sources".

    Really. Interesting.

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    Blue Jumper It is a perfect word and meaning............

    Quote Originally Posted by drk View Post

    "Sources".

    Really. Interesting.
    It is a perfect word and meaning............and of top of it it is the same in French as in English.
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    Quote Originally Posted by drk View Post
    I don't know what the situation is like in Europe. But I'm sure that will portend what could happen here.

    I would like to know how it works over there.

    Are there just ophthalmologists writing Rxs and giant vertical optical corporations filling them? I'm sure Lux has eaten all the competition over there as well.
    Can't speak for Europe in general, but in the UK the market is definitely polarising. You have those who appreciate eyecare and understand the value of what we do and then you have those who don't. My practise has been successful in recent years because we have targeted the former, and there still seem to be plenty of them. The latter inevitably go online or to the supermarket.

    Essilor have bought up most of the independent labs. Not noticed much from Luxottica except them buying more designer brands. Their only retail presence to my knowledge is in sunglasses.

    I refuse to deal with either company, haven't done for the last 5 years, and have gone from strength to strength whilst my competitors all sell the same products.

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    Well, to me it's a bit of "doublespeak" or camouflage.

    Maybe I'm taking it wrong, but it seems like it's saying "we are your source".

    Who is the "your" in that idea?

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