Italy’s Luxottica and France’s Essilor have signed a 46 billion euro (US$49 billion) merger to create a global eyewear powerhouse with annual revenue of more than 15 billion euros.
The all-share deal is one of Europe’s largest cross-border tie-ups and brings together Luxottica, the world’s top spectacles maker with brands such as Ray-Ban and Oakley, with leading lens manufacturer Essilor, Reuters reports.
“Finally … two products which are naturally complementary — namely frames and lenses — will be designed, manufactured and distributed under the same roof,” Luxottica’s 81-year-old founder Leonardo Del Vecchio said in a statement on Monday.
The merger between the top players in the 95 billion eyewear market is aimed at helping the businesses to take full advantage of expected strong demand for prescription spectacles and sunglasses due to an aging global population and increasing awareness about eye care.
Jefferies analysts estimate that the market is growing at between 2 percent and 4 percent a year, while Luxottica and Essilor say that at least 2.5 billion people in the world still suffer from uncorrected vision problems.
The deal also removes — for now at least — uncertainty over succession at Luxottica, which has lost three CEOs since 2014 because of rifts with Del Vecchio.
Both companies have been grappling with slowing sales growth, hit by weakness in North America, and face rising competition from cheaper rivals and the challenge of online distribution.
While Asia and Latin America are seen by the companies as potential growth markets, e-commerce will also be a top priority.
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