EssilorLuxottica has launched legal action against global optician group GrandVision as it seeks information on how the firm has been managed during the COVID-19 pandemic.
In response, GrandVision has initiated arbitration proceedings to confirm it had not breached the agreement, a move EssilorLuxottica regards “as a surprising and obvious attempt … to detract”.
For the past year, EssilorLuxottica has been seeking to acquire a controlling interest in the Dutch-based multinational for up to €7.2 billion (AU$11.8 b) in order to control its more than 7,200 stores across 40 countries and vastly expand its retail presence.
However, the Franco-Italian eyewear giant initiated proceedings against GrandVision in a District Court in Rotterdam, the Netherlands, on 18 July.
“This is to assess the way GrandVision has managed the course of its business during the COVID-19 crisis, as well as the extent to which GrandVision has breached its obligations under the support agreement,” EssilorLuxottica said in a statement.
“Despite repeated requests, GrandVision has not provided this information on a voluntary basis, leaving EssilorLuxottica with no other option but to resort to legal proceedings.”
In response, GrandVision confirmed it had been informed of the court action demanding additional information into its efforts “to mitigate the impact of COVID-19 on its business”.
“GrandVision strongly disagrees with EssilorLuxottica’s demands and has full confidence that these claims will be rejected in court,” the company stated.
It continued: “GrandVision has also received notice from EssilorLuxottica claiming that GrandVision, in relation to the aforementioned COVID-19 actions, is in material breach of its obligations under the support agreement concluded in connection with the envisaged sale by HAL Optical Investments B.V. of its 76.72% ownership interest in GrandVision to EssilorLuxottica.
“GrandVision strongly disagrees with these claims and has responded accordingly.”
Later, on 30 July, GrandVision announced it had commenced arbitration proceedings to obtain confirmation that GrandVision is not in material breach of the agreement.
“GrandVision also wants to ensure that EssilorLuxottica complies with its obligations under the support agreement, in particular regarding merger clearance processes,” the company stated.
EssilorLuxottica acknowledged the arbitration, although it said it “regards these … as a surprising and obvious attempt by HAL and GrandVision to detract from GrandVision’s breaches under the support agreement and its failure to provide EssilorLuxottica with required information”.
It continued: “EssilorLuxottica is acting in full compliance with the block trade agreement and the support agreement and any suggestion to the contrary is baseless.”
EssilorLuxottica’s original summary legal proceedings are scheduled to continue at a court hearing on 10 August.
The proposed EssilorLuxottica-GrandVision deal is under review by the European competition authority. It has been unconditionally cleared in the US, Russia and Colombia, and is under review also in Brazil, Chile, Mexico and Turkey.