By Luisa Zargani
with contributions from Katya Foreman
 on October 1, 2018

MILAN — The EssilorLuxottica merger is finally taking shape.

According to a prospectus published on Essilor’s web site, on Monday Luxottica executive chairman Leonardo Del Vecchio‘s family holding Delfin was submitting its shares in the giant Italian eyewear group, or 62.42 percent of total, at a ratio of one share in Luxottica for each 0.461 per Essilor share.

The newly formed EssilorLuxottica will then launch a mandatory exchange offer for all the remaining shares at the same ratio between Oct. 29 and Nov. 27, with the view of delisting Luxottica’s shares in Milan. However, the squeeze-out, if any, including the settlement, could be expected between Jan. 28 and March 4, 2019.

First revealed in January 2017 and promising to likely to transform the sector’s global landscape and spark both further technological innovation and deals, the merger was expected in the last quarter of 2018, following the approval of all interested competition authorities.

According to the prospectus, EssilorLuxottica will present mandatory documents on the tender offer to Consob, Italy’s equivalent of the Securities and Exchange Commission, on Oct. 11.

After the transaction, Del Vecchio through Delfin will have a 38.3 percent stake in EssilorLuxottica. A group of Essilor partners and employees will have a 4.9 percent stake and the remaining 56.8 percent will be publicly held. In the case of the offer being entirely endorsed, Delfin’s shares in EssilorLuxottica would decrease to 31.3 percent, those of Essilor partners would decrease to 4 percent and the floated stock would amount to 64.7 percent. EssilorLuxottica will control 100 percent of Essilor and 100 percent of Luxottica.

Billed as the world leader in ophthalmic optics and a key player in visual health, Essilor, which is active across prescription glasses, sunglasses and reading glasses, and in ophthalmic optics equipment, counts the following brands in its portfolio: Varilux, Crizal, Eyezen, Xperio, Transitions, Bolon, Foster Grant and Costa, according to the Essilor web site.

The company counts 67,000 employees in 70 countries, 55 percent of which are Essilor shareholders; 34 plants; 481 prescription laboratories and edging facilities; and 14 distribution centers.

Luxottica produces eyewear under license for names including the Giorgio Armani Group, Bulgari, Burberry, Chanel, Coach, Prada and Versace and has a number of owned brands, such as Ray-Ban, Oakley and Persol. It and Essilor, the leading maker of lenses worldwide, have agreed to a 46 billion euro, or $48.7 billion, merger to form an eyewear powerhouse with annual sales of more than 15 billion euros.

Luxottica and Essilor combined will have more than 140,000 employees and sales in more than 150 countries.

In the new entity, Luxottica founder Leonardo Del Vecchio will serve as executive chairman and chief executive officer and Hubert Sagnières, Essilor’s chairman and ceo, will become executive vice chairman and deputy ceo. Del Vecchio and Sagnières will also keep their positions of executive chairman of Luxottica and chairman and ceo of Essilor International, respectively.

According to the Essilor prospectus, EssilorLuxottica’s “mission will be to help people see more, be more and live life to its fullest. The company’s ground-breaking products correct, protect and frame the beauty of the most precious sensory organ — the eyes. By combining proven expertise in lens technology and eyewear manufacturing, a portfolio of brands that consumers love and global distribution capabilities, EssilorLuxottica will enable people everywhere to learn, to work, to express themselves and to fulfill their potential. Lack of awareness and access have led to a global vision crisis with severe social and economic consequences for billions of people. EssilorLuxottica will exist to give vision a voice and to respond to the world’s growing vision needs by meeting the changing lifestyles of existing consumers and inventing new ways to reach the 2.5 billion people who suffer from uncorrected poor vision and the 6 billion people who do not protect their eyes from harmful rays.”

Essilor and Luxottica will each report stand-alone third quarter 2018 sales on Oct. 22. The first board meeting of EssilorLuxottica is scheduled for Nov. 29.

On Monday, Luxottica shares closed up 0.89 percent at 59.04 euros, while Essilor shares closed up 1.30 percent at 128.75 euros.

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