The merger of the two giants of the ophthalmic optic industry is proceeding as planned, moving toward its completion by the end of the year provided it is endorsed by anti-trust authorities. An overwhelming majority of Essilor International's shareholders approved the terms of the transaction at their general assembly last month, while Luxottica decided to withdraw its shares from the New York Stock Exchange (NYSE), leaving the stock trading only on the Milan Bourse pending the merger.
Essilor's annual and extraordinary general meeting in Paris approved all the resolutions put forward by the board of directors, with a majority of 95 percent or more. Described as a milestone in the history of Essilor, which was born out of the merger of Essel and Silor in 1972, the vote will pave the way for the creation of a new group, called EssilorLuxottica, by the end of this year.
Based on the scenario outlined in January, when the board of directors of Essilor and Luxottica approved the $49 billion merger of their two companies, Luxottica's largest shareholder, Delfin, will contribute its 62.55 percent stake in Luxottica in exchange for a 38 percent stake in Essilor, which will be subsequently brought down to 31 percent in terms of voting rights. Essilor will then make an offer to buy the remaining shares in Luxottica. Delfin is the family holding company of Leonardo Del Vecchio, the founder and executive chairman of Luxottica, who reportedly attended Essilor's meeting in silence.
Luxottica's shareholders discussed the merger at the company's annual meeting in April, but they were not asked to approve it. The merger proposal had been already approved by Delfin's shareholders - i.e. Del Vecchio's family - at the general meeting of that company.
Meanwhile, Luxottica has stopped trading on the NYSE, noting that it represented only 3.7 percent of the trading volume in its own shares during the 12 months to May 1. It noted that maintaining a listing in the U.S. entailed significant administrative costs and that the delisting was going to be “efficient” in light of the scheduled tie-up with Essilor. Luxottica was the first Italian company to be listed on the NYSE in 1990 before being traded in Italy.
Luxottica's share will continue to be listed on the Milan stock exchange until all the shareholders of Luxottica tender their shares and the merger with Essilor is fully completed. At that point, EssilorLuxottica will only be listed on the Paris stock exchange, but Luxottica will still have its own head office in Milan.