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EssilorLuxottica, the world leader in optics, filed a lawsuit in Rotterdam, the Netherlands, to obtain information from the global optical distributor GrandVision about the impact of the coronavirus crisis on its business and to assess the extent of GrandVision’s breaches of its obligations under the Support Agreement.
Despite several requests, Europe’s largest optical retail chain did not provide the information requested by EssilorLuxottica on its business during the Covid-19 crisis. This left the latter with no other option than to take legal action.
It all goes back to last summer, more precisely to the month of July when Essilorluxottica announced its intention to acquire HAL Holding N.V.’s 76.72% stake in the capital of GrandVision and to buy it back at a price of 7.2 billion euros.
It was last February that the European Commission opened an in-depth investigation into this giant operation which could lead to a reduction in competition on the wholesale market for spectacles and lenses as well as on the retail market for optical products.
As a result, EssilorLuxottica would have control over more than 7,000 additional stores in more than 40 countries in Europe, America and Asia, in addition to the 9,100 it already owns worldwide.
The European Commission had thus given itself until 20 August to deliver its verdict. However, EssilorLuxottica’s appeal to the Dutch courts could change this timetable and “increase uncertainty about the outcome of the transaction,” warn analysts at Italian investment bank Equita SIM.
While EssilorLuxottica said that the lawsuit launched on Saturday is intended to enable it to understand how GrandVision managed its business during the new coronavirus crisis and to assess the extent of its breaches of its obligations under the “support contract“, GrandVision also said it supports EssilorLuxottica’s plan to acquire all of its capital.
In a press release also issued on Saturday, GrandVision reacted by stating that it “strongly disagrees with EssilorLuxottica’s claims” and that it is fully confident that EssilorLuxottica’s claims will be rejected by the court.
According to specialists, the Franco-Italian group “certainly does not intend to give up” the buyout, but it may seek to renegotiate the terms because of the impact of the health crisis on GrandVision’s share price.
EssilorLuxottica is the result of a merger between France’s Essilor, the world leader in ophthalmic lenses, and Italy’s Luxottica, the number one in frames for prestigious brands such as Prada, Ray-Ban and Chanel, which took place in October 2018.
The GrandVision optical group’s stock fell 5.5% on Monday on the stock market after EssilorLuxottica announced Monday that it had filed a lawsuit.
Read also > BRUSSELS: THE EUROPEAN COMMISSION RELEASED ITS GRIEFS TO ESSILORLUXOTTICA ON THE BUY-UP OF GRANDVISION
Feature photo : © Luxottica[/vc_column_text][/vc_column][/vc_row]
