Ray-Ban Maker Remains Committed to GrandVision Deal

(Bloomberg) -- EssilorLuxottica SA, the maker of Ray-Ban sunglasses, remains committed to its proposed 7.3 billion-euro ($8.3 billion) purchase of retailer GrandVision NV, people with knowledge of the matter said.

The Franco-Italian company still sees value in acquiring GrandVision’s network of eyewear shops across Europe, according to the people, who asked not to be identified because the information is private. It is focused on securing antitrust approvals for the deal, the people said.

Although EssilorLuxottica isn’t currently trying to renegotiate the price of the transaction, it could seek to change the terms later if the Dutch company’s business fails to recover, the people said.

Shares in GrandVision rose 3.5% at 4:32 p.m. in Amsterdam, more than any full-day gain since March 24, while the Netherlands’ benchmark index declined.

European antitrust authorities are reviewing the transaction and could require the two companies to make concessions to ensure approval. Representatives for GrandVision and Paris-based EssilorLuxottica declined to comment.

GrandVision, which has more than 7,000 stores and a presence in over 40 countries, said in March it’s unlikely to reach its medium-term growth targets this year due to the pandemic. The company said last month it doesn’t expect a quick recovery following store reopenings, amid enhanced health and safety measures and general consumer uncertainty. The EssilorLuxottica transaction should close within 12 to 24 months, GrandVision said at the time.

Pandemic Effect

French luxury conglomerate LVMH Moet Hennessy Louis Vuitton SE said last week its board has discussed the company’s $16 billion purchase of U.S. jeweler Tiffany & Co. amid reports the deal may need to be reworked. Exor NV’s planned $9 billion sale of the PartnerRe reinsurance unit collapsed after Italy’s Agnelli family turned down a request by France’s Covea to renegotiate the agreed-upon price.

The idea that EssilorLuxottica may seek to renegotiate the GrandVision deal is plausible, given GrandVision’s “meaningful deterioration” in performance this year, Morgan Stanley said in April. There will likely be a “high degree of uncertainty” around the earnings trajectory in coming quarters, analyst Elena Mariani wrote in an April 2 research note.

EssilorLuxottica has itself been hit hard by the pandemic as customers delay non-essential medical visits and purchases. Some of the integration work following the merger of France’s Essilor and Italy’s Luxottica has also been delayed because of the pandemic, the company said last month.

©2020 Bloomberg L.P.