French lens maker Essilor International SA agreed to buy Luxottica Group SpA, the maker of Ray-Ban sunglasses, for about 22.8 billion euros (US$24 billion), combining the largest manufacturer and retailer in eyewear.
Luxottica investors will get 0.461 of an Essilor share for each share they own, the Italian and French companies said in a statement yesterday.
The bid is worth 47.07 euros based on Friday last week’s share price, 5 percent lower than Luxottica’s close of 49.56 euros.
Leonardo Del Vecchio, Luxottica’s 81-year-old founder and controlling shareholder, agreed to the deal and will become executive chairman and chief executive officer of the new company, EssilorLuxottica, which will have more than 15 billion euros in annual revenue.
Del Vecchio is to be the single largest shareholder with his Delfin holding company owning a stake of between 31 and 38 percent.
The deal creates a branded goods giant with a market value that rivals the second-biggest luxury maker, Hermes International.
The companies said they expect revenue and cost synergies of 400 million euros to 600 million euros in the medium term.
Essilor is the largest manufacturer in the industry and Luxottica the biggest retailer, according to Chris Cooper, an analyst at Jefferies.
Essilor Chairman and chief executive officer Hubert Sagnieres is to become executive vice chairman and deputy chief executive officer with equal powers.
Delfin agreed to contribute its 62 percent stake in Luxottica to Essilor in exchange for stock in the newly created group.
Milan-based Luxottica, which also makes frames for luxury brands such as Armani, Chanel Prada, has a market value of about 24 billion euros as of Friday last week, 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 eyewear 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$121 billion 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.
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 last year 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 in March last year announced it will seek to accelerate growth by investing more than 1.5 billion euros over three years.
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Micron Technology Inc is a driving force pushing the US Congress to pass legislation that would put new export restrictions on equipment its Chinese competitors use to make their chips, according to people familiar with the matter. A US House of Representatives panel yesterday was to vote on the “MATCH Act,” a bill designed to close gaps in restrictions on chipmaking equipment. It would also pressure foreign companies that sell equipment to Chinese chipmaking facilities to align with export curbs on US companies like Lam Research Corp and Applied Materials Inc. The bill targets facilities operated by China’s ChangXin Memory Technologies Inc
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
RSS