Italy's Luxottica, the maker of Ray-Ban, and France's Essilor have agreed a 46 billion euro ($49 billion) merger to create a global powerhouse in the eyewear industry with annual revenue of more than 15 billion euros. Ivor Bennett reports.
The names in Luxottica's armoury are impressive. As well as Oakley, the Italian eyewear firm own Ray-Ban and the license for brands like Burberry and Ralph Lauren. But all those have been put in the shade, by a name many won't have heard of. The merger with the French lens manufacturer Essilor is worth 46 billion euros creating a powerhouse with annual revenue of more than 15 billion euros. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "The merged company will cement its global leadership in the eyewear market. I think it'll have something like a 27 percent global market share. Johnson & Johnson next player down - less than 4 percent." While many of Luxottica's brands are aimed at the younger audience. it's the older end of the market that holds the value. The eyecare industry is worth nearly 100 billion dollars An aging population means it's only going to get bigger. The new company will be run by Luxottica's founder Leonardo Del Vecchio One of Italy's richest men. But some doubt whether minority shareholders have got such a good deal. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "The minorities are certainly not being bid at a reasonable price. They'll be compulsorily bought out, and at which point in time you'll have Leonardo Del Vecchio effectively in a position to hoover up." Del Vecchio took back control of Luxottica after going through three chief execs in the last two years. prompting doubt over his successor. but it seems investors can now see the future a little clearer. With shares in both companies jumping 14 percent on news of the merger.