Essilor and PPG Industries have disclosed that they are currently in talks regarding the future of their joint venture, Transitions Optical, which is the biggest supplier of photochromic lenses to optical manufacturers in the world and a consolidated subsidiary of PPG.
According to PPG, the outcome of the discussions with Essilor remains, at this state, unpredictable. Possible outcomes may include a modification of the current joint venture structure, or a sale of all or a portion of Essilor's interests in Transitions to PPG, or a sale of all or a portion of PPG's interests in Transitions to Essilor. These solutions might result either from a negotiated transaction or from the exercise of contractual rights that exist between the parties.
PPG added that it cannot predict the timing for the completion of its discussions with Essilor, although it expects that these will continue over the next several months. There is also no assurance that discussions will result in any of the outcomes set forth above.
Transitions Optical was formed in 1990. PPG is the majority shareholder, with a 51 percent interest, while Essilor holds the remaining 49 percent and is also the largest customer of Transitions.
PPG and Essilor have been business partners in connection with Transitions for more than 22 years, both contributing to the success of the venture. Transitions accounted for a significant portion of the sales and earnings of PPG's Optical and Specialty Materials segment in 2012, and it is on schedule to expand its technology platforms through the introduction of new important products globally. Talks around Transitions are occurring in the midst of other important developments at PPG, which is in the process of spinning off its commodity chemical business. While the discussions between PPG and Essilor continue, Transitions intends to continue operations without interruption.