Essilor Case Study

763 Words 4 Pages

In this essay we will talk about the merger of two giant in the glasses industry: the world's leader in ophthalmic optician Essilor and Luxottica the world's largest manufacturer of spectacle frames. In September 2014, Luxottica affirmed that a closer relationship with Essilor had been explored 18 months earlier but had not been completed, as conditions had not been met. At the time, Luxottica was facing problems of governance. Indeed, Luxottica has been affected by management difficulties, Leonardo del Vecchio then strengthened his control over the group by taking the executive powers. His first goal was seeking an opportunity to reach a deal with Essilor. Finally, these two companies announced in the mid of January 2017 a merger
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The industry which has seen strong growth, was valued at $ 100 billion in 2015 by US consulting firm Grand View Research. This market is growing at between 2 and 4 percent a year and it is mainly due to the aging of the population and a growing awareness about eye care issues. Moreover, these last years the competition has increased between the two groups which had been entering in each other areas of expertise. Indeed, Essilor has bought online retailers and Luxottica has invested in lens manufacturing. Moreover, the two companies were facing two important challenge: fierce competition from cheaper rivals such as niche luxury company and innovative start-ups and the expansion of online distribution. At the end, this is a perfect timing for both companies to benefit from strong synergies and insure their first place in the …show more content…
In term of leadership and management, the two CEO seem to have similar visions and shared values. Their common mission is to improve vision worldwide thanks to innovation and entrepreneurial spirit. Moreover, the deal will permit to end the succession issues and controversy.
Concerning the new governance and structure, they have publically claimed their ambition and the fact that they will co-managed the merged entity. Luxottica´s executive chairman would become the executive chairman and CEO of the new entity and Essilor chairman and CEO, Hubert Sagnières will become the executive chairman and deputy CEO. This deal seems to be between equals and will permit a balanced integration process.

To conclude, we can say that this is a very promising deal between two companies which seems complementary in many ways. Now, the success of this deal depends on how they will manage the post-merger integration and properly achieve all the potential

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