EssilorLuxottica: EssilorLuxottica to acquire HAL's 76.72% interest
in GrandVision and launch a mandatory public offer for the
remaining shares upon completion of the transaction
EssilorLuxottica to acquire
HAL's 76.72% interest in GrandVision and
launch a mandatory public offer for the remaining shares upon
completion of the transaction
EssilorLuxottica intends to acquire full
ownership in GrandVision to create a truly global eyecare and
eyewear company
- EssilorLuxottica to acquire HAL's 76.72% interest in
GrandVision at a cash purchase price equal to Euro 28 per share –
to be increased by 1.5% to Euro 28.42 if closing of the acquisition
does not occur within 12 months from the announcement
date
- Transaction supported by GrandVision's Management Board
and Supervisory Board
- After the closing of the Transaction with HAL,
EssilorLuxottica will launch a Mandatory Public Offer for all
outstanding GrandVision shares
- Irrevocable commitment received from HAL to sell its
shareholding to EssilorLuxottica
- The combination, which further complements
EssilorLuxottica’s scope of activities, will allow the company to
deliver a superior eyecare and eyewear experience to more people
globally
- The Transaction is expected to close in 12 to 24
months
- GrandVision will benefit from EssilorLuxottica’s
commitment to, and investment in, product innovation, supply chain,
talent development and digital knowledge to foster a richer
relationship with GrandVision’s more than 150 million
consumers
- Through the acquisition of GrandVision,
EssilorLuxottica will expand its optical retail platform, primarily
in Europe, by adding more than 7,200 stores globally, over 37,000
employees and Euro 3.7 billion in annual revenue
- The Transaction is subject to various closing
conditions, including regulatory approvals and mandatory
consultation procedures
Leonardo Del Vecchio, Executive Chairman of
EssilorLuxottica commented: "Following the creation of
EssilorLuxottica, which I strongly pursued, the acquisition of
GrandVision represents the realization of a vision that has guided
my actions and the growth of Luxottica over all these years. With
GrandVision we will be able to develop our retail network, finally
extended throughout the geographies, and fully enable our
multichannel and digital platforms. We will raise the quality of
in-store experience for products, brands and services for the
benefit of all consumers and our wholesale customers.”
Hubert Sagnières, Executive Vice Chairman of
EssilorLuxottica stated: “This acquisition is another step towards
our ambition to eradicate poor vision in the world before 2050.
Following the combination with Luxottica, it‘s a milestone in our
vision of reshaping the optical industry with the aim to provide
all consumers of the world a better optical experience with higher
quality eyewear. We look forward to welcoming the 37,000 employees
of GrandVision to the growing EssilorLuxottica family.
Together, we will have an even stronger voice to
champion better vision everywhere in the world.”
Stephan Borchert, CEO of GrandVision: “The
future integration of GrandVision with EssilorLuxottica brings new
opportunities to GrandVision’s business, its well-established
retail banners, stores, employees and all our stakeholders.
Furthermore, it will create a truly global eyecare and eyewear
company that is ideally positioned to capture changing consumer
needs and behaviors, and provide its customers with a high quality
optical omni-channel customer experience. This transaction is
expected to provide value to GrandVision’s shareholders, while
allowing for the acceleration of GrandVision’s growth strategy
through the expansion of our store network and online platforms.
EssilorLuxottica’s interest in joining forces with GrandVision is a
clear recognition of GrandVision’s successful strategy, our
state-of-the-art retail platform and our people. We look forward to
joining forces with EssilorLuxottica in what will be an exciting
new chapter ahead.”
Kees van der Graaf, Chairman of the Supervisory
Board of GrandVision: “The proposed combination of GrandVision and
EssilorLuxottica provides an excellent opportunity to further
strengthen the growth prospects of GrandVision. The Management
Board and Supervisory Board of GrandVision decided to fully support
the transaction as we believe it will contribute to the long-term
sustainable success of the business and is in the best interests of
GrandVision's stakeholders.”
Charenton-le-Pont, France (July
31, 2019 – 7:00 am) – EssilorLuxottica S.A.
(“EssilorLuxottica”), a global leader in the design, manufacture
and distribution of ophthalmic lenses, frames and sunglasses today
announces an agreement with Hal Optical Investments B.V. (“HAL”), a
wholly-owned subsidiary of HAL Holding N.V, for the sale of HAL’s
76.72% ownership interest in GrandVision N.V. (“GrandVision” or the
“Company”), a global leader in optical retail (the "Block Trade
Agreement"). Under the Block Trade Agreement, EssilorLuxottica will
buy HAL’s shares for a price of Euro 28 per share, to be increased
by 1.5% to Euro 28.42 if closing of the Transaction (the
“Transaction”) does not occur within 12 months from the
announcement date. GrandVision supports the Transaction under the
terms of a support agreement with EssilorLuxottica (the “Support
Agreement”).
Closing of the Transaction between
EssilorLuxottica and HAL is subject to various conditions,
including obtaining antitrust clearance. The Transaction is
expected to close in 12 to 24 months. After the Transaction has
been successfully concluded, EssilorLuxottica will launch a
mandatory cash public offer (the “Mandatory Public Offer”) for all
outstanding shares in the Company, in accordance with the
applicable Dutch public offer rules.
For EssilorLuxottica, the combination with
GrandVision will serve as a catalyst to unlock the underlying
growth potential of the eyewear and eyecare industry. The
activities of both companies are highly complementary.
EssilorLuxottica currently operates over 10,000 stores and several
proprietary online platforms with a strong presence in the
Americas. GrandVision operates more than 7,200 optical stores and
online platforms in more than 40 different countries with a strong
presence in Europe and Latin America.
GrandVision will bring more than 37,000
employees and Euro 3.7 billion in annual revenue to
EssilorLuxottica, growing the company’s reach and expanding its
dialogue with end consumers. The combination with GrandVision will
create an extended multichannel platform to seize future
opportunities in retail and in consumer interaction on eyecare and
eyewear products and services.
Further complementing EssilorLuxottica’s scope
of activities, while maintaining its open business model, the
Transaction will also bring under the same roof GrandVision’s 125
years of experience and success in putting the customer at the
center of its business. Additionally, it will give EssilorLuxottica
an opportunity to strengthen its direct-to-consumer business,
benefitting from GrandVision’s technologies, competencies and human
capital that have made it a success.
Expanding its retail operations, while
maintaining strong wholesale distribution, EssilorLuxottica will
increase its capacity to drive consumer engagement more
effectively, to raise the standard of in-store experience,
resulting in more regular eye exams, up-to-date prescriptions and
an increased availability of multiple tailored vision care products
to meet all of their vision and style needs.
At the same time, GrandVision will benefit from
EssilorLuxottica’s outstanding product innovation, manufacturing
and commercialization, integrated IT system, brand portfolio,
state-of-the-art supply chain, talent development and digital tools
and expertise to foster a closer and increasingly omnichannel
relationship with GrandVision’s more than 150 million consumers
around the world.
EssilorLuxottica and GrandVision share common
values and are both committed to delivering superior eyecare and
eyewear to more people globally. The companies share a deep and
century-long interest in doing business in a way that benefits all
stakeholders, including customers, employees, shareholders,
business partners, suppliers, and the communities in which they are
present.
Transaction structureThe Block
Trade Agreement provides for the purchase by EssilorLuxottica of
the entire participation of HAL in GrandVision equal to 76.72% at a
price per share of Euro 28 payable in cash, to be increased by 1.5%
to Euro 28.42 if closing of the Transaction does not occur within
12 months from the announcement date, representing a total
consideration of approximately Euro 5.5 billion.
The purchase price of Euro 28.00 per share as
agreed between EssilorLuxottica and HAL represents the following
premium to the undisturbed share price:
- a premium of 33.1% to GrandVision’s closing price on July 16,
2019 of Euro 21.04;
- a premium of 37.6% to GrandVision’s average volume weighted
price for the one-month period up to and including July 16, 2019 of
Euro 20.35; and
- a premium of 41.7% to GrandVision’s average volume weighted
price for the three-month period up to and including July 16, 2019
of Euro 19.77.
Prior to the closing of the Transaction,
GrandVision is permitted to pay dividends of up to Euro 0.35 per
share for 2019 and Euro 0.37 per share for 2020 (or, in each case,
40% of net results if lower) without adjustment to the purchase
price under the Block Trade Agreement.
Conditions and terminationThe
Transaction is subject to, among other things, approval from
various antitrust authorities and other third parties.
EssilorLuxottica has committed to taking certain actions required
to obtain merger clearance in each of the relevant jurisdictions,
but it will not be required to consent to any remedies which may
materially adversely affect the value of the combination of
EssilorLuxottica and GrandVision as a whole, materially affect the
strategic rationale of the Transaction or otherwise impose an
unreasonable burden on either EssilorLuxottica or
GrandVision.
In addition to the approvals mentioned above,
the Transaction is subject to various other conditions including
completion of mandatory consultation procedures with employee
representative bodies, performance of the parties' obligations
under the Block Trade Agreement, no breach of warranties,
performance of the obligations by GrandVision under the Support
Agreement, and the appointment conditional upon closing of the
Transaction of four EssilorLuxottica nominees to the Supervisory
Board. Furthermore, the Transaction is conditional upon
GrandVision's net debt at closing being less than Euro 993
million.
In case of termination of the Transaction as a
result of (i) failure to satisfy the condition to obtain approval
from the relevant regulatory authorities by July 30, 2021 (the
“Long Stop Date”) or (ii) a breach of the agreement or a breach of
warranties by EssilorLuxottica resulting in any closing conditions
not being met, EssilorLuxottica shall pay termination compensation
in the amount of Euro 400 million to HAL. In case the agreement is
terminated as a result of the net debt of GrandVision being more
than Euro 993 million, HAL shall pay to EssilorLuxottica
termination compensation in the amount of Euro 100 million.
The price of the Mandatory Public Offer will be
determined in accordance with Dutch law and will be at a minimum
the price per share paid to HAL pursuant to the Block Trade
Agreement (as it may be adjusted in accordance with the Block Trade
Agreement).
The Block Trade Agreement and the Support
Agreement may not be terminated as a result of a superior third
party offer for the shares in GrandVision.
Support AgreementGrandVision
has agreed to support the Transaction and EssilorLuxottica
acquiring control.
In addition to a general commitment to support
the Transaction, GrandVision more specifically agreed to cooperate
with EssilorLuxottica in connection with (i) the antitrust
clearance process (including by offering certain remedies in order
to obtain antitrust clearance), (ii) the required filings for the
Mandatory Public Offer, (iii) the financing of the Transaction
(including the refinancing of GrandVision's existing debt) (iv)
consultation procedures with employee representative bodies, (v)
convening a general meeting in which EssilorLuxottica's nominees
for the Supervisory Board can be conditionally appointed, and (vi)
accepting certain restrictions in GrandVision's conduct of business
until Closing, including with respect to M&A. In addition,
GrandVision and EssilorLuxottica have each agreed to abstain from
performing any actions that would reasonably be expected to
materially prejudice or render more difficult closing of the
Transaction.
After closing of the Transaction and the
Mandatory Public Offer, EssilorLuxottica intends to terminate
GrandVision’s listing on Euronext Amsterdam and to acquire 100% of
the shares of GrandVision pursuant to statutory buy-out proceedings
or to obtain full ownership of GrandVision’s business through other
second-step transactions. GrandVision acknowledges and agrees that
it will be desirable that following the closing of the Transaction,
EssilorLuxottica acquires full ownership of GrandVision and its
business and has agreed that the Management Board and Supervisory
Board will reasonably consider any reasonable proposals for such
post-closing second-step transactions.
EssilorLuxottica and GrandVision have agreed
that any related party transactions that are not in the ordinary
course or at arm's length terms, require the affirmative vote of at
least one independent member of the Supervisory Board of
GrandVision. Such affirmative vote will be required until
EssilorLuxottica holds all shares in GrandVision or has initiated
statutory buy-out proceedings. EssilorLuxottica has furthermore
agreed not to acquire any GrandVision shares or other securities
before the launch of the Mandatory Public Offer.
FinancingEssilorLuxottica has
obtained, subject to customary conditions, committed bridge
financing for the Transaction from reputable global financial
institutions of approximately Euro 8 billion and plans to
refinance through debt and equity, or equity-like instruments, in
the amount of up to Euro 2 billion.
Corporate Governance It is
envisaged that upon successful completion of the Transaction and
until the earlier of EssilorLuxottica acquiring full ownership or
initiating statutory buy-out proceedings, the Supervisory Board of
GrandVision will be composed of four members to be identified by
EssilorLuxottica and two current members of GrandVision's
Supervisory Board, Mr. Kees van der Graaf and Ms. Rianne Meijerman,
qualifying as independent under the Dutch Corporate Governance
Code. Mr. Kees van der Graaf will continue to serve as Chairman of
the Supervisory Board.
In addition, EssilorLuxottica has strong respect
and appreciation for the work done by the current management team
of GrandVision and is pleased that Mr. Stephan Borchert and Mr.
Willem Eelman have expressed their commitment to remain as CEO and
CFO of GrandVision post-closing of the Transaction and the
subsequent Mandatory Offer.
StrategyThis Transaction will
fully serve EssilorLuxottica’s ambition to unlock the underlying
growth potential of the eyecare and eyewear industry. It will
provide EssilorLuxottica with additional resources to promote
awareness and access in the industry and serve the growing appetite
for brands and quality in eyewear.
EssilorLuxottica fully supports the mission and
strategy of GrandVision. It is envisaged that GrandVision will
maintain its geographical footprint and global retail network as
well as its business model as an integrated multibrand optical
omnichannel retailer, with a balanced portfolio of brands and
products to tap the needs of all its customers.
With this Transaction, GrandVision will become
part of a global eyewear and eyecare group with outstanding product
innovation, manufacturing and commercialization, technology, brand
portfolio, supply chain, talent development and digital expertise
to foster a closer relationship with its wholesale and final
consumers around the world. This would highly accelerate the
strategic objectives GrandVision communicated to investors in
September 2018, seizing future opportunities in retail and consumer
interaction with eyecare and eyewear products and services.
GrandVision will have the resources it needs to
grow and maintain its reputation in the optical retail space and
will benefit from the access to EssilorLuxottica’s multiproduct and
multibrand portfolio as well as to EssilorLuxottica’s multichannel
ecosystem, including new digital tools, integrated IT system,
state-of-the-art supply chain and logistics.
Through a combination with GrandVision,
EssilorLuxottica intends to grow revenue and profit through
efficiency gains and business expansion, notably in terms of store
openings, corner openings in hosted environments and omnichannel
activities. Moreover, the enlarged group intends to invest into new
store openings and store maintenance and renovation in line with or
better than GrandVision current standards and to support Solaris
concept, subject to further evaluation.
In the planned combined company, the GrandVision
organization will operate EssilorLuxottica’s ophthalmic retail
activities in Europe, the Middle East and Africa, while the current
EssilorLuxottica organization will operate the retail networks in
Latin America and North America.
EmployeesEssilorLuxottica
values greatly the experience and expertise of GrandVision's
employees, which are a crucial asset for the future success of the
combination. EssilorLuxottica is committed to providing
GrandVision's employees new career opportunities as members of the
enlarged group.
EssilorLuxottica aims to foster a culture of
excellence, where qualified employees are offered training and
national and international career perspectives. The nomination,
selection and appointment of staff for functions within the group
will be based on the “best person for the job” principle and on a
non-discriminatory, fair, business-oriented and transparent set of
criteria without any discrimination on the basis of nationality,
current employer or otherwise.
The Transaction’s rationale is not based on
workforce reduction, but to the contrary on the quality and
capabilities of the human and physical assets of GrandVision.
Accordingly, EssilorLuxottica does not currently envisage
redundancies of any significance as a result of the Transaction. If
a future integration of activities would entail redundancies,
change in work location or other reorganization, all applicable
consultation requirements and procedures (with employee
representative bodies) will be observed.
EssilorLuxottica has committed to respect the
existing rights and benefits of GrandVision employees, including
under their individual employment agreements, collective labor
agreements, and if any, existing employee consultation structure,
existing redundancy and social plans and pension rights.
Timetable EssilorLuxottica and
GrandVision will work together to obtain all necessary merger
clearances. It is expected that it will take approximately 12 to 24
months before closing of the Transaction.
At or prior to the Annual General Meeting of
Shareholders in 2020, GrandVision will propose the conditional
appointment of four Supervisory Board members to be nominated by
EssilorLuxottica. The appointment will be effective upon and
subject to closing of the Transaction.
After closing of the Transaction and given
EssilorLuxottica will obtain an ownership interest in excess of
30%, EssilorLuxottica will have the obligation to make a Mandatory
Public Offer for all remaining outstanding shares of GrandVision.
Settlement of the Mandatory Public Offer is expected to take place
approximately 6 months after closing of the Transaction.
EssilorLuxottica is a global leader in the
design, manufacture and distribution of ophthalmic lenses, frames
and sunglasses. Formed in 2018, its mission is to help people
around the world to see more, be more and live life to its fullest
by addressing their evolving vision needs and personal style
aspirations. The company brings together the complementary
expertise of two industry pioneers, one in advanced lens technology
and the other in the craftsmanship of iconic eyewear, to set new
industry standards for vision care and the consumer experience
around it. Influential eyewear brands including Ray-Ban and Oakley,
lens technology brands including Varilux® and Transitions®, and
world-class retail brands including Sunglass Hut and LensCrafters
are part of the EssilorLuxottica family. In 2018, EssilorLuxottica
had nearly 150,000 employees and pro forma consolidated revenues of
Euro 16.2 billion. The EssilorLuxottica share trades on the
Euronext Paris market and is included in the Euro Stoxx 50 and CAC
40 indices. Codes and symbols: ISIN: FR0000121667; Reuters:
ESLX.PA; Bloomberg: EL:FP.
CONTACTS
EssilorLuxottica Investor
Relations(Charenton-le-Pont) Tel: + 33 1 49 77 42
16(Milan) Tel: + 39 (02) 8633 4870E-mail:
ir@essilorluxottica.com |
EssilorLuxottica Corporate
Communications(Charenton-le-Pont) Tel: + 33 1 49 77 45
02(Milan) Tel: + 39 (02) 8633 4470E-mail:
media@essilorluxottica.com |
DisclaimerThis is a public
announcement by EssilorLuxottica S.A. pursuant to section 17
paragraph 1 of the European Market Abuse Regulation (596/2014).
This public announcement does not constitute an offer, or any
solicitation of any offer, to buy or subscribe for any
securities.
This press release contains forward-looking
statements that reflect EssilorLuxottica’s current views with
respect to future events and financial and operational performance.
These forward-looking statements are based on EssilorLuxottica’s
beliefs, assumptions and expectations regarding future events and
trends that affect EssilorLuxottica’s future performance, taking
into account all information currently available to
EssilorLuxottica, and are not guarantees of future performance. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future, and
EssilorLuxottica cannot guarantee the accuracy and completeness of
forward-looking statements. A number of important factors, not all
of which are known to EssilorLuxottica or are within
EssilorLuxottica’s control, could cause actual results or outcomes
to differ materially from those expressed in any forward-looking
statement as a result of risks and uncertainties facing
EssilorLuxottica. Any forward- looking statements are made only as
of the date of this press release, and EssilorLuxottica assumes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or for any other
reason.
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