Luxottica to buy Oakley sunglasses for $2 billion

Maverick · Jun 25, 2007

The consolidation of the business also in the sunglass industry ...

Luxottica to buy Oakley sunglasses for $2 billion
By Vivek Shankar and Sara Gay Forden
Bloomberg News
Friday, June 22, 2007

SAN FRANCISCO: Luxottica Group, the world's biggest maker of eyeglasses, said Thursday that it had agreed to buy Oakley for $2.03 billion as a way to add sports sunglasses to its Ray-Ban and Ralph Lauren brands.
Shares of both companies surged. Stockholders of Oakley, based in Foothill Ranch, California, will receive $29.30 a share, 16 percent more than the closing price Wednesday, according to a statement.
The bid by Luxottica, which is based in Milan, follows an offer by PPR this year of €5.3 billion, or $7.1 billion, for Puma at a time when premium sports brands command higher prices. Oakley's Nanowire styles sell for $300. Its glasses are endorsed by the cyclist Lance Armstrong and the golfer Annika Sorenstam.
"Nobody can touch Luxottica now," said Gian Luca Pacini, an analyst with Caboto Equity Research in Milan. "If you calculate the synergies they expect to exploit, the acquisition adds value. It's the industry's No. 1 player, with the sports brands, luxury brands and optical retailers."
Luxottica has posted seven straight quarters of rising profit by adding licenses to make luxury sunglasses for Burberry Group and Polo Ralph Lauren, as demand in the United States and emerging markets has surged.
The Italian company said Oakley would also bolster "service and innovation" for its wholesale customers.
Luxottica also owns LensCrafters and Pearle Vision, both retail chains. Luxottica said the chains would be complemented in North America by Oakley's namesake outlets, Bright Eyes stores and Sunglass Icon shops.
In 2006, Oakley had sales of $761.9 million and 3,400 employees.
"This is maybe one of the best brand acquisitions Luxottica has made," said Alessandro Capuano, a trader with IG Markets in London. "One of the areas Luxottica was lacking was sunglasses for sports. There will be some good synergies."
Luxottica shares jumped €1.97, or 7.5 percent, to close at €28.21 in Milan. Oakley's shares added $3.17, or 13 percent in early trading, to trade at $28.40 on the New York Stock Exchange. The shares have climbed 57 percent in the past 12 months, fueled by first-quarter profit that tripled and by takeover speculation. La Repubblica, the Italian daily, reported this month that Luxottica was interested in buying Oakley.
Luxottica is about five times as big by sales as its nearest rival, Safilo SpA, and its market value is about nine times as large. Safilo, based in Padua, Italy, also produces glasses for luxury labels, including Armani, Gucci and Dior.
Luxottica stock has gained 21 percent since this year, compared with an 8 percent increase for Safilo.
The Oakley chief executive, Scott Olivet, and the company's president, Colin Baden, were invited to join Luxottica. The companies did not say whether the Oakley founder, Jim Jannard, who has a 64 percent stake in the company, would have a role.
First-quarter profit for Oakley tripled to $5.7 million, as sales rose 31 percent to $199 million.
Sara Gay Forden reported from Milan.
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kdotc · Jun 25, 2007

niceeee...they got the sporty shades in their company

Luxottica to buy Oakley sunglasses for $2 billion

Maverick Lord Vader

kdotc 안녕하세요빅뱅K-Dragon입니다