All eyes on Luxottica, Essilor merger

A global eyewear colossus worth nearly $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.

Luxottica and Essilor said Monday they had agreed to a 46-billion-euro ($49-billion) merger with a view to creating a global powerhouse in the eyewear industry.

Leonardo Del Vecchio, Luxottica's executive chairman, and Hubert Sagnières, Essilor's chairman and CEO, would be co-leaders of the new eyewear giant, the companies said.

The children each own 12.5 percent of Delfin so he could leave 25 percent to his second wife, whom he remarried in 2010.

In Paris, shares in the French group went up 16.4.5% to 118.9 euros.

Following completion of the transaction, Delfin would own 31% to 38% of the shares of EssilorLuxottica, and would be the holding firm's largest shareholder.

Shares of Luxottica were up 8.35% in Paris trading after the announcement, while Essilor shares traded 11.51% higher in Paris. With the family set to have a smaller influence in the merged company, the deal with Essilor could help him achieve this.

The €90 billion global glasses industry is one of the fastest-growing sectors in the world: 1.9 billion people wear spectacles, but analysts suggests 2.5 billion more need corrective lenses.

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

Essilor said it had reached an agreement with Luxottica's owners for an all-share deal to combine the two lens companies. Luxottica's shares would be delisted afterward, the companies said.

Luxottica ended 2015 with revenue of approximately $9.38 billion, about 80,000 employees and retail network of some 7,800 stores.

Essilor and Luxottica projected the newly combined company would progressively generate revenue and cost synergies ranging from roughly $424 million to $636 million in the medium term.

But disagreements with Guerra led to his sudden exit in the summer of 2014, and Del Vecchio returned to be the driving force at Luxottica's Milan headquarters. Lens manufacturing will be a big deal for Luxottica as it makes it independent for sun and prescription lenses, it said.

Mediobanca advised Delfin on the merger, with Essilor advised by Rothschild and Citi.

Luxottica and Essilor, which have a market value of about 24 billion euros and 22 billion euros respectively, had explored a possible tie-up a few years ago.

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