EssilorLuxottica acts to end Franco-Italian leadership row
today May 13, 2019
EssilorLuxottica declared an end to a damaging feud between its French and Italian partners on Monday, saying it would focus on finding a new chief executive and integrating the eyewear group formed by a 54 billion euro ($61 billion) merger.
Shares in EssilorLuxottica, which have been rattled as the dispute was fought out in public, were up 1 percent at 0824 GMT, among the best performers on the Paris benchmark CAC-40 index which was down 0.7 percent.
EssilorLuxottica resulted from the 2018 merger of French lenses maker Essilor and Italian peer Luxottica. They were supposed to have equal weighting in the combined company’s leadership, but accused each other of trying to dominate.
As part of the public peace accord, neither Franceso Milleri from Luxottica nor Essilor’s Laurent Vacherot will apply to become EssilorLuxottica’s new group chief executive.
Milleri and Vacherot would instead be tasked with accelerating moves to simplify the combined group by fully integrating the French and Italian components within the next 12 to 24 months, EssilorLuxottica said.
EssilorLuxottica is due to hold its annual shareholder meeting on Thursday, where minority investors have been expected to voice their frustration over the leadership row.
“I’m very pleased with this outcome,” said Leonardo Del Vecchio, Executive Chairman of EssilorLuxottica adding that it demonstrated the strong industrial rationale of the deal.
“Today, respecting the equal power and the combination agreement, we have found a solution to better execute such strategic combination,” added del Vecchio, who is also the company’s top shareholder, owning almost a third of the group.
This was echoed by Del Vecchio’s French counterpart Hubert Sagnieres, who is vice-chairman of EssilorLuxottica and said it would leave the company well placed to accelerate its growth.
The accord was also welcomed by Valoptec, a group representing more than 10,000 former and active employees, which will join EssilorLuxottica’s Strategy & Integration committee.
“Valoptec ... will assume its role for the group’s human capital, which must always be considered as a long-term investment,” it said.
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