French Essilor and Delfin join forces

Essilor and Delfin have announced the signing of an agreement designed to create an integrated player dedicated to visual health and superior consumer experience through a combination of French Essilor and Italian Luxottica Group, held by Delfin of Luxembourg. Together, Essilor and Luxottica will be in a stronger position to address the vision needs of the 7.2 billion people in the world out of which 2.5 billion people still suffer from uncorrected vision problems.
This transaction would allow the combined group to better seize growth opportunities resulting from strong demand in the eyewear market, driven by the increasing need for corrective and protective eyewear and the appetite for strong brands. The combination would create a key player, operating across all segments of the eyewear industry. The new entity would leverage state-of-the-art production capabilities and widespread distribution networks to better serve clients and deliver value to all stakeholders.
Together, Luxottica and Essilor would have more than 140,000 employees and sales in more than 150 countries. Based on the companies’ 2015 results, the new company would have posted combined net revenues of more than €15 billion and combined net EBITDA of approximately €3.5 billion.
The two groups share common values: their mission is to improve vision across the world with innovation as a growth driver, operational excellence, an entrepreneurial spirit and an international mindset.
Based on a preliminary analysis, the combined group is expected to progressively generate revenue and cost synergies ranging from €400 million to €600 million in the medium term and accelerating over the long term. It will also benefit from a robust balance sheet and strong cash flow generation, giving it the financial flexibility to invest in its future growth both externally and internally.
Since its creation in 1961, Luxottica has built an outstanding portfolio of proprietary eyewear brands, including Ray-Ban® and Oakley®, and prestigious licensed brands, loved by consumers everywhere. Luxottica operates a well-developed retail and wholesale network in both developed and emerging markets, along with innovative e-commerce platforms, engaging a new generation of digital consumers. State-of-the-art manufacturing footprint makes up the backbone of the company, where the most advanced R&D, equipment, materials and processes are used to make frames that are excellent in quality and style.
Essilor would become a holding company with the new name “EssilorLuxottica” via a hive-down of all of its operating activities into a wholly-owned Company, to be called Essilor International, and the contribution by Delfin of its Luxottica shares. Following the transaction, Delfin would own between 31% and 38% of the shares of EssilorLuxottica and would be its largest shareholder. The voting rights of any shareholder of EssilorLuxottica would be capped at 31% and there would no longer be double voting rights for the shares. The transaction is subject to Essilor’s Works Councils’ information and consultation procedure according to French law.
Essilor designs, manufactures and markets a wide range of lenses to improve and protect eyesight. Its mission is to improve lives by improving sight. To support this mission, Essilor allocates more than €200 million to research and innovation every year, in a commitment to continuously bring new, more effective products to market. Its flagship brands are Varilux®, Crizal®, Transitions®, Eyezen™, Xperio®, Foster Grant®, Bolon™ and Costa®. It also develops and markets equipment, instruments and services for eyecare professionals. Essilor reported consolidated revenue of more than €6.7 billion in 2015 and employs 61,000 people worldwide. It markets its products in more than 100 countries and has 32 plants, 490 prescription laboratories and edging facilities, as well as five research and development centers around the world.
Delfin Sarl is the Luxembourg based holding company of the Del Vecchio Family. Delfin Sarl was founded in 2006 from the previous Italy based holding Delfin Srl. Delfin main investments are in Luxottica Group SpA, Fonciere Des Regiones SA, Assicurazioni Generali SpA and Unicredit Spa.
Luxottica is a leader in the design, manufacture and distribution of fashion, luxury and sports eyewear. Its portfolio includes proprietary brands such as Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples and Alain Mikli, as well as licensed brands including Giorgio Armani, Burberry, Bulgari, Chanel, Coach, Dolce&Gabbana, Michael Kors, Prada, Ralph Lauren, Tiffany & Co, Valentino and Versace. The Group’s global wholesale distribution network covers more than 150 countries and is complemented by an extensive retail network of approximately 7,800 stores, with LensCrafters and Pearle Vision in North America, OPSM and LensCrafters in Asia-Pacific, GMO in Latin America, Salmoiraghi & Viganò in Italy and Sunglass Hut worldwide. In 2015, Luxottica posted net sales of approximately Euro 9 billion and more than 80,000 employees.