Rodenstock has not been able yet to make a formal offer, but its preliminary proposal to take over the whole Galileo group together with two local Italian entrepreneurs has been turned down. The German company, whose core business is shifting from ophthalmic instruments to lenses, had shown interest in acquiring Galileo's Italian holding company, now in liquidation proceedings, its old plant at Marghera, near Venice, and its highly profitable 60 percent owned US-based subsidiary, Signet Armorlite, which could have helped it to penetrate the US market. Signet Armorlite is the biggest manufacturer of eyeglass lenses in the USA. It markets lenses worldwide under the Signet and Kodak brand names.
At a meeting yesterday, Galileo's liquidators approved in principle a letter of intent presented by a small manufacturer of lenses in Belluno, Ital Lenti, which has offered to take over only Galileo's factory and trademark for 12 billion lire (e6m) . Acting under pressure from Italy's central government, they conditioned final acceptance of the offer on the presentation by Jan. 20 of a detailed industrial development plant for the Marghera factory. If the deal goes through, the other assets will probably be acquired by Signet Armorlite itself, following a major refinancing program. Signet Armorlite had previously proposed to take over the holding company without the Galileo plant , which shut down last spring, laying off its 120 employees.
The ultimate decision rests with the Italian government investment firm, Itainvest, and Galileo's creditors, which now own 49 and 51 percent of Galileo, respectively.
The unions, the mayor of Venice and members of the central Italian government had supported Rodenstock's more global proposal as it would have allowed to preserve the unity of the Galileo group and guaranteed the technological development of the Marghera factory. Rodenstock was reportedly prepared to buy the assets of the whole group for e15 million and to take over a e22 million debt. Rodenstock had also indicated its intention to invest an additional e500,000 to improve the manufacturing process at Marghera, and to establish the Galileo holding company's headquarters in Venice.
Rodenstock's top management participated in a decisive meeting held in Milan last Dec. 21 where it asked for 3-4 months to make a full audit of Galileo's assets, but the sellers apparently responded that they could not wait that long. Carlo Maria Colombo, Galileo's former president, chaired the meeting as the person mandated by the shareholders to handle the group's liquidation. The oddest aspect of this affair is that Colombo is also Signet Armorlite's chairman, thus casting him simultaneously in the role of both seller and purchaser.
Signet Armorlite (600 employees) has grown to become the biggest and most profitable company within the Galileo group, with an annual turnover of 200 billion lire (e103m) and profits of 6 billion lire (e3m). It has a recently expanded European headquarters in Gloucester, UK. Sales subsidiaries in France, Spain and Germany have their own sales networks and laboratories. Galileo also owns 100 percent of Galoptical and Crossbow, which have plants in Ireland with 200 people. Galileo owns 60 percent of Komaze, a Russian production company with a workforce of around 1,000 employees.