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Violations of Essilor-Luxottica Merger Agreement Alleged

Arbitration is being sought.

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The top shareholder of EssilorLuxottica has, through his holding company Delfin, asked for arbitration to address alleged violations of the merger agreement between Essilor and Luxottica, Reuters reports.

Leonardo Del Vecchio, who serves as executive chairman of the combined company, filed the request with the International Chamber of Commerce. Reuters reports that the filing relates to “alleged violations of a power-sharing agreement”.

The companies completed their merger in October. The organization has since been plagued by infighting among its leadership.

Essilor’s Hubert Sagnieres, who serves as vice chairman of the merged organization, has reportedly said Del Vecchio staged a “de facto attempt to take control of the new group.”

Del Vecchio has claimed that Sagnieres failed to communicate with him on matters such as filling key management jobs.

Reuters reports that arbitration proceedings could take two years.

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Jerome Schupp, fund manager at Geneva-based investment firm Prime Partners, told Reuters that the fight is “war between the French and the Italians.” Essilor is a French lens maker and Luxottica is an Italian frame maker.

“All this risks blocking the planned synergies,” Schupp said. “It’s very bad for the stock.”

Read more at Reuters

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