Ray-Ban owner will go ahead with pre-pandemic $8.7 billion GrandVision buy despite fight with seller
EssilorLuxottica SA will go ahead with its planned 7.3 billion-euro ($8.7 billion) purchase of Dutch eyewear retailer GrandVision NV at the previously agreed price, ending a dispute between the two sides after the pandemic laid waste to parts of the consumer industry.
EssilorLuxottica said it will honor the purchase price of 28.42 euros, originally agreed in July 2019, for each share of GrandVision, according to a statement on Tuesday. The move comes a week after the suitor said it was reviewing its options.
The maker of Ray-Ban sunglasses had gained leverage to renegotiate the deal with a court ruling that would have allowed it to change the terms or even walk away at no cost. In the end, the buyer decided that “the strategic rationale of the transaction remains strong and unchanged,” Chief Executive Officer Francesco Milleri said in the release.
“It was high time,” Luca Solca, an analyst at Sanford C Bernstein & Co., wrote by email. “We salute the decision to go ahead with the merger at no discount, as cool-headed assessment of business rationale and strategic perspective prevail over negotiation brinkmanship.”
GrandVision shares rose 14% to 28.20 euros in early trade in Amsterdam, while EssilorLuxottica increased by 0.8% in Paris.
Relations with the target company had soured in the aftermath of the pandemic, prompting the buyer to sue GrandVision for information over business performance during the Covid-19 health crisis.
With a network of more than 7,000 international stores, GrandVision will help EssilorLuxottica strengthen its dominance in the global eyewear market, even as lockdowns and the tilt toward online retail diminished the relevance of physical outlets.
GrandVision said in a separate release that it “takes note” of EssilorLuxottica’s decision to complete the purchase of the 76.7% owned by HAL Investments, a holding controlled by the billionaire Van der Vorm family.
The acquisition is another win for EssilorLuxottica Chairman Leonardo Del Vecchio, the 86-year-old tycoon who built an empire thanks to his dealmaking prowess. Del Vecchio managed to retain control of the eyewear giant after an audacious combination of Italy’s Luxottica, which he founded, with the French lens maker Essilor.
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.