Corporate DispatchPro LISA JUCCA VIA REUTERS BREAKINGVIEWS
Ray-Ban maker may finally live up to merger vision EssilorLuxottica (ESLX.PA) may finally live up to its merger vision. The Paris-listed company on Friday ended the power-sharing pact underpinning the 2018 union that brought together the Italian maker of Ray-Ban sunglasses with the French purveyor of Varilux lenses. Axing duplication should enable the 63 billion euro giant to cut costs faster while wiping out a persistent discount.
The world’s biggest eyewear player has spent three years grappling with a clumsy governance structure. Luxottica founder Leonardo Del Vecchio, the company’s largest shareholder with a 32% stake, agreed to share power with his French partners on a 16-member board. The arrangement led to high-profile spats between the two sides. The company also struggled to install a single chief executive, opting instead for an unnecessary duplication of top management roles. EssilorLuxottica has now fixed its governance. The company’s new board is smaller and comprises mostly independent directors. By approving Del Vecchio as chairman and his trusted aide Francesco Milleri as chief executive, shareholders have given the Italian duo an unchallenged grip. The clearer management structure should help unlock up to 300 million euros of annual cost savings arising from the EssilorLuxottica merger, promised by 2023. Though the figure is a modest 2% of the companies’ combined operating expenses in 2019, analysts estimate only 50 million euros has materialised so far. EssilorLuxottica could save a further 200 59
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