EssilorLuxottica and GrandVision have finally signed a merger agreement, which will result in the creation of one of the largest optical retail groups globally. The French-Italian eyewear company, EssilorLuxottica, has been in negotiations with the Dutch optical retailer, GrandVision, since the summer of 2019. The finalization of the agreement comes after a lengthy delay due to legal battles and regulatory hurdles.
The merger agreement between EssilorLuxottica and GrandVision sets out the terms and conditions for the acquisition of the Dutch optical retailer. The agreement stipulates that EssilorLuxottica will acquire GrandVision for a total consideration of €7.2 billion. This consideration will be paid in cash, and the merger is expected to be completed by July 2021.
The acquisition of GrandVision by EssilorLuxottica is a strategic move to gain a larger market share in the global optical retail industry. EssilorLuxottica is already the world`s leading eyewear company, with brands such as Ray-Ban, Oakley, and Persol under its portfolio. The acquisition of GrandVision, which has over 7,000 stores in 40 countries, will add a significant number of stores to EssilorLuxottica`s retail network.
The merger will also provide EssilorLuxottica with access to GrandVision`s digital platforms, which are expected to play a significant role in the future of the optical retail industry. As a result, EssilorLuxottica will be able to leverage GrandVision`s digital expertise to enhance its online presence and improve its customer experience.
However, the merger between EssilorLuxottica and GrandVision has faced legal and regulatory challenges, mainly due to concerns about competition. The European Commission raised concerns that the acquisition would lead to reduced competition in the optical retail industry in several European countries. As a result, EssilorLuxottica had to make significant concessions to obtain regulatory approval. The company has agreed to divest over 300 stores in Italy, France, and the Netherlands to address the competition concerns.
In conclusion, the merger agreement between EssilorLuxottica and GrandVision is a significant development in the global optical retail industry. It will create a powerful player in the market, with a large retail network and digital capabilities. The acquisition will help EssilorLuxottica to expand its reach and consolidate its position as the leading eyewear company in the world. However, the regulatory concessions required to secure the deal demonstrate the high level of scrutiny that such mergers face in the current market.