Even though the merger between Essilor and Ray-Ban-maker Luxottica is an old idea, it may still tickle Italy’s protectionist streak. Several domestically-controlled companies have sold or shipped out in the recent past. The Agnellis moved both Fiat and the holding company Exor to the Netherlands. Pirelli sold out to ChemChina, while Italcementi was bought by Germany’s HeidelbergCement.
The Frenchness of Essilor adds an extra frisson. Gallic raider Vincent Bollore has taken effective control of Telecom Italia, and is locked in a battle with former Prime Minister Silvio Berlusconi over ownership of broadcaster Mediaset. The fear is French companies are hoovering up Italian firms, shielded by a protectionist country that that once branded yoghurt-maker Danone a strategic asset.
The deal does have a cost for Italy. As Luxottica delists, Milan’s bourse loses a national champion. Over time, its roughly 8,000 Italian employees may feel their importance downgraded. Novelty giveaways, like the bonus shares they were given to honour the 80th birthday of founder Leonardo Del Vecchio, may be a thing of the past. Still, Luxottica was always a global company. It was first listed in New York, not Milan. And investors had been nervous over the dominance of Del Vecchio and his family, which had led to a carousel of exits by chief executives. The new structure dilutes Del Vecchio to a 31 percent voting stake. Luxottica’s business may thrive more with Essilor than alone.
The deal comes at a tricky time for Italy, which recently lost its reformist, business-friendly Prime Minister Matteo Renzi. The risk is that the country returns to a period of political instability and deters foreign investment, which under Renzi had picked up. It would be better, though, to look on the bright side. A high-profile deal turns an Italian company into a European one, and shows the country is open for business