Australia's Leading Ophthalmic Magazine Since 1975

     Free Sign Up     

Australia's Leading Ophthalmic Magazine Since 1975

     Free Sign Up     
News

EssilorLuxottica deadlock continues, mediator appointed

01/05/2019By Callum Glennen
Share:
EssilorLuxottica shareholders’ recent attempts to introduce new, independent directors to break the board’s current management deadlock have failed. A mediator has also been appointed, as the industry giant’s ongoing leadership woes continue.

On 24 April EssilorLuxottica’s board of directors rejected two propositions for the appointment of additional board members to break the current deadlock: one by Essilor shareholder group Valoptec Association, and another from a group of investors led by investment management company Fidelity International, Bloomberg reports.

A statement released by EssilorLuxottica said the appointment of additional board members would be a violation of the merger agreement struck between the two companies.

“The board of directors recommended at the majority that the shareholders vote against all the proposed resolutions which, if approved, would result in a clear breach of the Combination Agreement and in a potential disruption for the activities of the board,” the statement read.

Following the merger of the Italian frame maker Luxottica and French lens maker Essilor both sides have accused the other of a power grab for control of the conglomerate. According to the terms of the merger, which was completed during October 2018, both factions agreed to share equal weight in the combined company’s leadership until 2021.

"The Board of Directors recommended at the majority that the shareholders vote against all the proposed resolutions which, if approved, would result in a clear breach of the Combination Agreement and in a potential disruption for the activities of the Board"

However, who will be appointed the inaugural CEO of the joint company has been a point of contention between Mr Leonardo Del Vecchio, executive chairman of EssilorLuxottica and former boss of Luxottica, and Mr Hubert Sagnières, executive vice-chairman of EssilorLuxottica and former head of Essilor. The disagreement has led to a deadlock in the board.

French media have reported that a mediator has been appointed to resolve the power struggle. According to France24, Essilor requested that the Paris Commercial Court assign someone to the case. Mr Frank Gentin, former president of the Commercial Court, has been given the job.

Essilor’s request for mediation follows a similar request by Del Vecchio. Del Vecchio lodged a request for arbitration with the International Chamber of Commerce in Paris in March through his family holding company Delfin,

On April 17 EssilorLuxottica announced that it has commenced its search for a CEO, and appointed two recruitment agencies to assist the company’s Nomination and Compensation Committee. The organisation has committed to appointing someone to the role by the end of 2020, and until a CEO is found the operating companies of Essilor and Luxottica will remain separate legal entities with different CEOs.

large leaderboard
advertisement

Allegations of a power grab have now dragged on for months. In November 2018 Del Vecchio nominated Mr Francesco Milleri, CEO of Luxottica, for the position.

Sagnières subsequently accused Del Vecchio of orchestrating a takeover by forcing his choice of managing director onto the group. Del Vecchio denied the accusation, and claimed that Sagnières was guilty of violating the merger agreement himself.

 

More reading:

EssilorLuxottica locked in leadership dispute, arbitration requested
EssilorLuxottica releases first financial result

 

large leaderboard
advertisement





rectangle
advertisement
Editor's Suggestion
Hot Stories

rectangle
advertisement


OR
 

Subscribe for Insight in your Inbox

Get Insight with the latest in industry news, trends, new products, services and equipment!