French mediator appointed over EssilorLuxottica power struggle
today Apr 26, 2019
A French mediator has been appointed to try and resolve a power struggle at the top of the world's largest eyewear-maker EssilorLuxottica that has plunged the recently merged group into crisis, a source close to Essilor told AFP Friday.
French lens-manufacturer Essilor and Italy's Luxottica, which produces Ray-Ban and Oakley sunglasses, merged in October to create a new global giant in the sector.
But the heads of both companies have accused each other of trying to take control of the group, violating the merger agreement which granted both equal power.
The clash between the group's Italian executive chairman, Luxottica founder Leonard Del Vecchio, and his French deputy and Essilor head Hubert Sagnieres had been roiling behind the scenes until it burst into the open last month.
The deadlock has been exacerbated by the split on the 16-member board of directors -- eight of whom were selected by Essilor and eight by Luxottica.
To try and break the stalemate, Essilor on Thursday requested that the Paris Commercial Court bring in an outside mediator, known as a "mandataire ad hoc".
Frank Gentin, a former president of the Commercial Court, was appointed on Friday, the Essilor source said.
He has helped unravel several thorny disputes between large companies in the past, including a four-year shareholder war between French luxury rivals LVMH and Hermes, which ended in a truce in 2014.
Del Vecchio's holding group Delfin, which is the EssilorLuxottica's main shareholder with a 32 percent stake, filed an arbitration request in March with the International Chamber of Commerce in Paris.
Delfin's request alleged that Sagnieres had violated the merger agreement.
Such a procedure usually takes around two years -- a long wait as the turmoil slows down the integration process between the two companies.
Copyright © 2020 AFP. All rights reserved. All information displayed in this section (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the contents of this section without the prior written consent of Agence France-Presses.