China's delay in agreeing to the Essilor Luxottica merger and delivery was forced to be delayed

China's delay in agreeing to the Essilor Luxottica merger and delivery was forced to be delayed

 

Due to the delay in obtaining the approval of the merger by the Chinese regulatory authorities,

 

Luxottica Group SpA (MTA:LUX; NYSE: LUX) Luxottica Group announced Friday

 

It has partnered with French optical eyewear manufacturing giant Essilor International SA (EI. PA) Essilor Group's trading deadline will be extended to July 31.

 

In the statement, Luxottica said that the parties remain confident that in the coming weeks,

 

The merger will complete antitrust investigations by Chinese and Turkish regulators

 

Smooth completion of the transaction.

 

As the transaction has not yet been approved, the first shareholders' meeting of the new company, Essilor Luxottica, which was originally scheduled for July 25, will also be postponed.

 

However, the exact date has yet to be rescheduled.

 

On January 15, 2017, after a huge earthquake in the eyewear manufacturing industry, Luxottica announced the acquisition of Essilor.

 

The merger was carried out in the form of 1 Luxottica share for 0.461 Essilor shares.

 

The combined company, Essilor Luxottica, will have revenues of 17 billion euros.

 

With 140,000 employees, it operates in 150 countries and regions.

 

After the merger, Luxottica Holding Company Delfin will own 31-38% of the new company, Essilor Luxottica,

 

Became the largest shareholder of the new company with 31% of the voting rights.

 

In fiscal 2017, Luxottica achieved net sales of 9,157 million euros, excluding currency effects.

 

an increase of 2.2% over 2016, with the U.S. market contributing 57% of sales; Adjusted operating profit increased by 2.7 percent to 1,442 million euros.

 

Adjusted net profit surged 12.2 percent to 970 million euros, thanks to the US tax reform, Italy's preferential patent tax regime and lower debt costs.

 

The group expects net sales to grow at constant exchange rates of 2%-4% this year.

 

Adjusted net income can grow at up to twice the sales growth.

 

The first quarter financial report at the end of April showed that due to the impact of bad weather and cleaning up wholesale channels,

 

Luxottica Group reported a constant currency decline of 0.8% in the first quarter

 

The strong euro led to a plunge in the group's actual sales from January to March by more than 10%.

 

Leonardo Del Vecchio, executive chairman of the Italian group, said in the financial report,

 

Following the clean-up of wholesale channels in China, the Group has also embarked on a channel balancing strategy in Europe.

 

It aims to be closer to consumers and improve the ability to innovate.

 

The company continues to invest in technology through the advantages of digital transformation.

 

Leonardo Del Vecchio said in his quarterly report at the end of April,

 

China, the merger's only core market, is expected to receive approval from the authorities in the first half of the year.

 

But now it seems that the Italians are overly optimistic.

 

In the shadow of the US-China trade war, the Chinese authorities are likely to focus their entire focus on resolving these disputes.

 

China's attempts to co-opt the EU against US trade policy have not been approved by the EU.

 

Essilor expects to accelerate to 4% this year after achieving comparable revenue growth of 3.1% last year.

 

Last year, the group's revenues totaled 7.490 billion euros, and the operating margin fell to 18.2% from 18.6% in 2016.

 

This compares to an outlook of 18.3% for this year.

 

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