The future management set-up at Essilor-Luxottica became more blurred after Hubert Sagnières, chairman and chief executive of Essilor, told the Financial Times earlier this month that “we will hire a professional CEO” once the merger is completed. In the interview published on Dec. 10, Sagnières added that the parties purposely do not want to put a timeframe in writing. “We say that within two years, three years, five years, six months we will hire a CEO,” he said. He ruled himself out for the post stressing that, at the age of 62, he was “too old” for the job.
Luxottica and Essilor have already agreed that Leonardo del Vecchio, the 82-year-old executive chairman of Luxottica, will be the chairman of the new group, while Sagnières will act as deputy chairman, with identical powers. Essilor and Luxottica will continue under their present management during the integration phase.
Del Vecchio, who will be the largest single shareholder of the merged group, told Corriere della Sera that the choice of who will actually run the company will be addressed at a later date. He will continue to oversee the integration with Essilor and focus on strategic decisions. He added that he had never had so much fun and that he is learning many new things.
Meanwhile, Reuters reported on Dec. 14 that the European Commission's anti-trust authority is likely to approve the mega-merger without setting any conditions. The report was denied by the Commission, indicating that it is not there yet. It has until March 8 to render its verdict. Some observers feel that important jurisdictions like those of the U.S., China and Brazil may give the green light, too, if the European Union blesses the merger, but it may have a tougher ride in the U.S. because of the weight of Luxottica's retail operations in the country.
On Nov. 28, Essilor and Luxottica announced that the merger proposal had been cleared by the Canadian Competition Bureau. Canada was one of the five countries where the anti-trust approvals are a condition for closing the transaction. Ten other jurisdictions have already endorsed it.
The positive reports have sent up the joint stock market capitalization of Essilor and Luxottica to more than €50 billion, almost equally split between the two companies. This compares with a joint valuation of about €46 billion when the merger proposal was announced last January.
More than 50 percent of Essilor's employees will be among the beneficiaries of the rising value of the new industry bemoth, which has started to be called Luxilor for short. Together, they hold around 8 percent of the company's shares through an association, Valoptec, which is the company's single largest shareholder. Essilor announced on Nov. 21 that the number of employees owning shares in the company had grown to over 35,000, or more than 50 percent of the global staff.
Announcing last May 11 the issue of up to 3,107,598 new shares reserved for its employees, the company had set a goal to reach an ownership ratio of 35 percent by 2020, compared with 21 percent in 2016. Subscriptions to the plan by 68 percent of the employees outside France played a decisive role in smashing the target.