Eyewear giant Luxottica, owner of Oakley, Ray-Ban, and Sunglass Hut, is merging with a giant in optical lenses, French-based Essilor.
The combined company is expected to generate annual revenue of €15 billion and will mark the first time frames and lenses will be designed, manufactured and distributed under the same roof.
Luxottica Chairman Leonardo Del Vecchio will be the largest shareholder of the new entity, which will be called EssilorLuxottica and based outside of Paris.
Del Vecchio will serve as Executive Chairman and CEO, and Essilor CEO Hubert Sagnières will take the title of Executive Vice Chairman and Deputy CEO. According to a statement, the two will have “equal power.”
However, the Wall Street Journal reports that the deal calls for Del Vecchio and Sagnières to have equal power only during the transition. After that, Del Vecchio will be able to control things in the boardroom because the agreement stipulates that no investor can have more voting rights than Mr. Del Vecchio.
The merger is expected to generate revenue and costs synergies of €400 million to €600 million in the medium term. Combined, the two companies have 140,000 employees.
The combined companies will have about 27% market share in the eyewear market, well ahead of competitors, according to the Wall Street Journal.
It is unclear what the merger will mean for Oakley, which is already reeling from massive job cuts after being more closely integrated into the Luxottica structure.
The deal is expected to close in the second half of 2017 if several regulatory hurdles are cleared.
