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Essilor, Luxottica close €48B merger to create eyewear giant

French lens maker Essilor International SA and Italian eyewear company Luxottica Group SpA have completed their €48 billion merger to create one of the largest players in the eyewear industry.

Luxottica's majority shareholder Delfin Sàrl contributed its 62.42% stake in the company to Essilor on Oct. 1. Essilor then became the parent company of Luxottica and was renamed EssilorLuxottica.

The deal has met all closing conditions, including approval by Essilor shareholders, the hive-down of substantially all Essilor activities to the subsidiary Essilor International SAS and clearance from all antitrust authorities.

Essilor issued 139,703,301 new ordinary shares through a capital increase without preferential subscription rights as consideration for Delfin's contribution.

The combined holding company, named EssilorLuxottica, will be a designer, manufacturer and distributor of ophthalmic lenses, prescription frames and sunglasses. Delfin holds 38.93% of the company's share capital comprised of 358,840,853 shares, with voting rights capped at 31%, while employees hold 4.9% and the remaining 56.8% of shares are held publicly.

EssilorLuxottica will start a mandatory exchange offer for the remaining issued and outstanding Luxottica shares, after which the interest held by Delfin would decrease to a minimum of 31% of EssilorLuxottica's share capital depending on the acceptance rate of the offer.

The new company's shares started trading on Euronext Paris under the ticker symbol EL on Oct. 2.

Luxottica's Executive Chairman Leonardo Del Vecchio will serve as EssilorLuxottica's executive chairman, with Essilor Chairman and CEO Hubert Sagnières acting as executive vice chairman with equal powers to those of the executive chairman.

EssilorLuxottica's board, which has 16 members, appointed Essilor CFO Hilary Halper and Luxottica CFO Stefano Grassi as co-CFOs of the combined company. The board will start a search for a CEO by the end of January 2019.