Essilor Advances on Sale of Stores for GrandVision Deal

(Bloomberg) -- EssilorLuxottica SA is pushing ahead with the sale of some optical retail businesses in Italy, the Netherlands and Belgium to meet antitrust requirements for its purchase of GrandVision NV, according to people familiar with the situation.

The deal covers some 350 stores that generated about 160 million euros ($196 million) of sales before the Covid-19 pandemic, said the people, who asked not to be identified as the process isn’t public.

EssilorLuxottica has hired Mediobanca SpA and Lazard Ltd. as financial advisers and is holding informal talks with potential buyers, the people said. Representatives for EssilorLuxottica, GrandVision, Mediobanca and Lazard declined to comment.

“This is another data point indicating a higher probability that this takeover will eventually complete,” Luca Solca, an analyst at Sanford C. Bernstein wrote by email in response to a Bloomberg query.

The EU’s blessing for the 7.3 billion-euro deal came in March, after a rocky year for EssilorLuxottica, the world’s largest supplier of eyewear. Despite EU approval, the pandemic’s effect on retail and a legal spat with GrandVision led EssilorLuxottica to consider its options, including renegotiating the price or even walking away from the transaction, people familiar with the situation said earlier this year.

EssilorLuxottica shares were up 0.8% as of 10:57 a.m. in Paris trading on Tuesday while GrandVision advanced as much as 0.9% in Amsterdam.

The stores sale doesn’t assure the deal will go ahead as an arbitration between EssilorLuxottica and GrandVision is still pending. The date for the deal completion is set at the end of July. Under the terms, EssilorLuxottica could be liable for a 400 million-euro termination fee should the transaction fall apart.

EssilorLuxottica agreed to sell the 35 stores of the GrandOptical chain in Belgium, 174 Italian stores and 142 stores in the Netherlands, the European Commission said in March.

“Getting a tighter grip on distribution seems a relevant step in EssilorLuxottica’s vision of standing tall in the industry with more sophisticated and differentiated products,” Bernstein’s Solca also wrote.

GrandVision said in April that it still backs EssilorLuxottica’s deal and that the two companies are working to obtain the final required regulatory approval in Turkey.

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