The planned merger between GrandVision and EssilorLuxottica is all but dead, as the former now agrees that the deal should be stopped... provided the French-Italian company pays a 400 million euro fee, sparking just another battle in the eyewear war.
Violated or not?
Both companies have seen the tug-of-war concerning their merger escalate into a legal war. EssilorLuxottica (which produces Ray-Ban and Varilux eyewear) went to court to get out of the planned merger, accusing GrandVision (which owns the Pearle and Eye Wish eyewear chains) of changing the way it does business during the Covid-19 pandemic. The Ray-ban producer sees this as a violation of the merger agreement, and therefore a way to get out of the operation.
The Dutch group however says that this is not a violation, but the only sensible way to do business. "If you see that turnover is collapsing, you have to act accordingly", Dutch newspaper FD quoted GrandVision's lawyers. They accuse EssilorLuxottica of trying to get out of the deal without paying a fee.
The right to walk away
GrandVision, which up to now had tried to hold on to the merger, has now put forward a compromise: if EssilorLuxottica pays a fee of 400 million euros, it buys itself "the right to walk away", a right which CEO Francesco Milleri is reported to crave for. His counterpart at GrandVision now agrees: "Please let them walk away and just give me the 400 million", CEO Mel Groot said in court - again according to FD.
However, EssilorLuxottica is not willing to go for the compromise and pay the nine-figure fee. If it can indeed prove that GrandVision has violated the merger agreement, the fee would not have to be paid. In that case, both companies simply go their own way again. On 24 August, the judge will decide about the way forward.