After more than a year of bickering, EssilorLuxottica is paying the full price for Pearle parent GrandVision. During the Covid crisis, the acquirer accused his future partner of mismanagement, but now all seems to be rosy again.
Carrying on regardless
Just a week ago, EssilorLuxottica, the eyewear giant behind Ray-Ban and others, was still haggling over the takeover of GrandVision. The French-Italian optics group was hoping to get a discount of one billion euros and 'only' pay 6.2 billion euros for the parent company of eyewear chains that include Pearle.
Now, however, EssilorLuxottica has changed its mind: CEO Francesco Milleri and deputy CEO Paul du Saillant have announced in a statement that they want to finalise the deal "without delay". That is what IEX reports. They have looked at all options, so they say, and regard this time as the ideal moment to expand the group's retail network. The optical sector has recovered from the Covid crisis and is once again on the path to growth.
GrandVision made mistakes
The Ray-Ban manufacturer will thus end up paying 28.42 euros per share, as agreed in 2019. For that amount, the optical giant will receive the entire 76.72 per cent majority stake that investor group HAL has had in GrandVision so far. However, a lot of legal costs have been incurred over the past year, as the coronavirus pandemic and the heated battle between the two parties erupted.
EssilorLuxottica felt that GrandVision had reacted badly to the Covid crisis and demanded to inspect the accounts. When that got refused, a series of raids and arbitration proceedings followed. The prospective buyer was proven right: GrandVision should have shared information regarding the coronavirus impact and thus (intentionally) violated the terms of the acquisition.
The fact that EssilorLuxottica did not seize this ruling to renegotiate the deal comes as a surprise. However, it shows how strong GrandVision is and, above all, how important the expansion of its retail network is for the eyewear manufacturer.