Leonardo Del Vecchio does not tell them, but the internal clash at EssilorLuxottica is costing the title dearly. On the Paris Stock Exchange the shares of the Italian-French giant drop 5,8% under one hundred euros in the aftermath of the harsh accusations launched by the owner of Luxottica.
“Delfin has identified certain behaviors of certain Essilor representatives that would merit the immediate adoption of appropriate measures by the Board, as they are contrary to the duty of sincere cooperation and good faith required by the 2017 combination agreement between Essilor and Delfin, essential for the correct functioning of the governance of the company”. This is what we read in the note issued yesterday evening, 20 March, with which the company announces that it will reserve actions to protect its interests.
Del Vecchio then decides to make matters worse in an interview given to Le Figaro and points the finger directly at Hubert Sagnieres, the manager with whom he shares the leadership of EssilorLuxottica.
Sagnières, says Del Vecchio. “As of January 2018, he has appointed four key managers, all from Essilor, with whom try to run EssilorLuxottica on its own. All these managers have been hired with permanent contracts, salary increase and "golden parachute".
And yet, underlines the number one of Luxottica, the pact provided that “any decision must be taken following an agreement between us. We are both CEOs, with equal powers".
Delfin's move “is contrary to the company's social interest, it damages the company and all its shareholders'. This is the answer, certainly not in the most conciliatory tones, of Sagnières who adds: “The behavior of Del Vecchio caused 'a shock' to the collaborators and executive teams of the Franco-Italian group, who are working on integrating their respective activities”.
Then the counterattack. Despite Del Vecchio's denials, the French manager attacked, "a certain number of his actions actually reveal an attempt to take control of the new group, without paying a premium to the shareholders," concluded Sagnières.
There is therefore an open confrontation between the two souls of the giant EssilorLuxottica. "From an operational point of view - comment the Equita analysts - a stalemate on governance increases the risks on the execution of the integration project". A project that should be completed in five years, two more than the three initially planned. “But in addition to this – continues Equita – we see risks of management defocusing and loss of important managerial resources, in a very delicate moment of integration. We see no room for a rethinking of the merger operation”.
In short, the merger would not be at risk, but the frictions between the top management could bring a lot of trouble to the company. We recall that Essilor and Luxottica officially merged last October and published the first ones on March 8th aggregate accounts. The largest eyewear manufacturer in the world was born from the marriage.
(Last update: 14.52 pm on 21 March).
