The merger of two of the family holding companies that control Luxottica has allowed the company's observers to shed light on the complex web of their interests. The notification of the transaction to the watchdog of the Milan Bourse shows that Leonardo Del Vecchio himself, founder and chairman of the group, directly owns only 2 percent of the main holding company, Leonardo Finanziaria. He is only beneficial owner as long as he is alive of the largest chunk of shares, whose ownership is divided among his six children.

The shareholding structure prior to the transaction shows Leonardo Finanziaria and two other family holding companies, Delfin and Leoinvest, owning together 68.8 percent of Luxottica. Leonardo Finanziaria owns 16.51 percent of Luxottica as well as 100 percent of Leoinvest, which in turn holds 37.24 percent of Luxottica's shares. Thus Leonardo Finanziaria owned prior to the transaction directly and indirectly 53.75 percent control of the world's largest eyewear producer and retailer. It also has various other investments such as Beni Stabili, a very large Italian real estate company.

The stock exchange filing shows a stake of 15.04 percent in Luxottica held by Delfin, a company in which Claudio Del Vecchio, Leonardo's oldest son, owned a 97.8 percent share. The balance was owned by Leonardo Finanziaria, which was instead described as the property of Leonardo's five younger children ? Marisa, Paola, Leonardo Maria, Luca and Clemente Clemente was born just over one year ago from Leonardo's marriage with Sabina Grossi, Luxottica's former manager of investor relations. According to a press report, each of these five children had lately about 19.5 percent of Leonardo Finanziaria. Leonardo Del Vecchio had a direct stake of 2 percent in this holding company, in addition to his beneficial ownership of all of his children's shares.

At the end of November, Leonardo Finanziaria took over a 2.2 percent stake in Luxottica that previously belonged to Delfin. Under the proposed new structure, Leonardo Finanziaria would be merged into Delfin. Observers speculate that the move would allow for each of Leonardo Del Vecchio's children to have an equal share of about 16.4 percent in Delfin, including Claudio who had been once touted as his father's successor. Based in the USA, Claudio Del Vecchio presides successfully over Brooks Brothers and other activities, but is a member of Luxottica's board of directors. His sister Paola is more involved in the eyewear sector as president of Type 20, a company whose ownership remains mysterious. That company owns Briko and licenses or distributes Arnette in various markets.

The observers speculate that the move may pave the way for a secondary offering of up to 20 percent of Delfin's shares on the stock market, possibly challenging the Del Vecchio family's effective control of Luxottica and giving more power to its new management, led by Andrea Guerra. A Luxottica spokesman declined to comment.

Anyhow, the disclosure of the family holdings seems to indicate that Luxottica's patriarch has been anxious to avoid any infighting among the growing number of his heirs. Beneficial ownership is not seen as a scheme to avoid inheritance taxes, which were abolished by Italy's present government some time ago.

Separately, Luxottica announced just before Christmas that it will pay dividends for the 2005 fiscal year in June 2006, and that it does not expect to adopt a policy of interim dividends for fiscal 2006.