EssilorLuxottica has completed the acquisition of optical retail giant GrandVision, ending uncertainty sparked by a legal ruling that granted the eyewear giant the option to walk away from the €7.3 billion (AU$11.2 billion) deal altogether.
On 29 June, EssilorLuxottica announced it would complete the purchase of HAL’s majority 76.72% stake in GrandVision. The deal took place on Thursday 1 July as per the terms of the original agreement signed almost two years ago.
“After assessing all our options, we have made the decision to proceed with the completion of the deal without further delay. The strategic rationale of the transaction remains strong and unchanged, and after two years of efforts and relentless work, we are now ready to turn a page and start a new chapter of EssilorLuxottica’s history, with GrandVision,” EssilorLuxottica CEO Mr Francesco Milleri and deputy CEO Mr Paul du Saillant said.
“In doing so, we will use the learnings and experience gathered over the past years to ensure GrandVision and its 37,000 talented employees are integrated successfully. As the industry returns to growth following the pandemic, we believe this is the perfect time to expand our retail network, so that we can engage more effectively with consumers and thus raise the visibility and quality of the entire industry. This will benefit all stakeholders, including our customers to whom we remain fully committed.”
By acquiring the shares owned by HAL – a Dutch investment group – EssilorLuxottica is expected to drastically increase its footprint by around 7,000 stores across 40 countries.
As a result of the completion of the transaction, EssilorLuxottica acquired “predominant control” over GrandVision and is under an obligation to launch a mandatory public offer for all outstanding shares, in accordance with the applicable Dutch public offer rules. EssilorLuxottica’s objective is to delist GrandVision from Euronext Amsterdam.
It comes after the Turkish Competition Authority became the final jurisdiction to clear the deal on 10 June.
However, 11 days later on 21 June, the transaction was in doubt after arbitration proceedings between the entities ruled in the favour of EssilorLuxottica.
The legal saga was sparked by EssilorLuxottica after it grew concerned about how GrandVision managed its business during the COVID-19 crisis. GrandVision later requested an arbitral tribunal to confirm among other things, that it was is not in material breach of its agreement with EssilorLuxottica. HAL has also initiated proceedings.
The tribunal ruled that EssilorLuxottica had the option to terminate the acquisition of GrandVision “due to GrandVision’s material breaches of its obligations to EssilorLuxottica”.
Prior to confirming it would go ahead with the acquisiton, EssilorLuxottica stated it would review its options and it “regretted that GrandVision’s misconduct has led us to this situation”.
With the deal now certain, EssilorLuxottica will purchase HAL’s interest in GrandVision for €28.42 per share.