The internal conflict at eyewear giant EssilorLuxottica SA increased March 21 after Luxottica Group SpA founder Leonardo Del Vecchio accused Essilor CEO Hubert Sagnieres of attempting to take undue control of the combined company, Reuters reported, citing Del Vecchio's statement to French newspaper Le Figaro.
Under the terms of the €48 billion merger that closed in October 2018, Essilor and Luxottica agreed that they would have an equal number of board members and that Del Vecchio and Sagnieres would have "equal powers."
But Del Vecchio, who is executive chairman of EssilorLuxottica and whose holding firm Delfin Sarl is the company's largest shareholder, said executive vice chairman Sagnieres "refuses a proposal from anyone else" and has behaved "as if Essilor had bought Luxottica" from their first meeting.
The comments follow a March 20 statement from Delfin that accused executives from Essilor of violating their merger agreement. Delfin also said it "reserves to take such actions as it will deem necessary or appropriate to protect its interest along with the interest of EssilorLuxottica and its stakeholders."
A source close to Essilor said it "learned with surprise and consternation about Delfin's statement and Mr. Del Vecchio's comment" and that further reaction would be given in the coming days, Reuters reported.
Del Vecchio added that the €400 million to €600 million of cost savings expected from the deal would now be achieved within five years instead of three.
Luxottica declined to comment on the matter when contacted by S&P Global Market Intelligence.
On March 13, reports surfaced that Essilor was against the appointment of Luxottica CEO Francesco Milleri as CEO of the merged entity.
In late afternoon trading in Paris, EssilorLuxottica shares were down 6.2%, or €6.52, at €98.48.