The combined company will be headquartered in Paris and will be listed in the Paris Stock Exchange.
As per two sources familiar with the knowledge at hand, France’s Essilor and Italy’s Luxottica have agreed to combine forces in order to become a global powerhouse in eyewear industry.
The $49 billion (46-billion euro) deal is expected to be announced sometime today.
According to a source, the deal is likely to see Leonardo Del Vecchio, Luxottica’s 81 year old founder, take a 31% majority stake in the combine company through Delfin, his family’s holding.
While Essilor is the world’s leading manufacturer of ophthalmic lenses, Luxottica figures in the world’s top brands of spectacle manufacturers.
Sources have described this mega deal as a “merger of equals.”
While Essilor’s market value has been pegged at 22 billion euros, Luxottica’s market value stands at a modestly higher value of 24 billion euros, thus giving the combined company a market capitalization of 46 billion euros.
With a staff of 140,000, as of 2015, their combined revenues total to nearly 16 billion euros.
Sources have disclosed that the merged group will be headquartered in Paris and listed on the Paris stock exchange.
According to Grand View Research, U.S.-based market consulting company, the rapidly expanding eyewear market, was valued at almost $100 billion in 2015.
With an ageing population in Latin America and in Asia, the eyewear market is expected to expand at a healthy pace in the coming years. Both regions are deemed as key growth markets for the eyewear industry.
The Financial Times has reported, citing anonymous sources, Del Vecchio is set to become the executive chairman of the combined company while Hubert Sagnieres, 60, who is the CEO and chairman of Essilor, will become its vice-chairman.
The merger comes in the wake of management upheavals in Luxottica in recent years, which have questioned Del Vecchio’s strategy and succession plans.
Industry sources state that the merger could put a lid onto such issues.
($1 = 0.9413 euros)