March 20, 2019 / 6:16 PM / a year ago

EssilorLuxottica infighting flares with new accusations

PARIS (Reuters) - Infighting at the top of EssilorLuxottica turned personal on Wednesday with the top shareholder and executive chairman accusing the Franco-Italian group’s executive vice chairman of a power grab in a newspaper interview.

France’s Essilor and Italy’s Luxottica merged last October, creating the world’s largest eye-wear maker in a 54 billion euro ($61.73 billion) deal.

The French and the Italian groups were supposed to have equal weighting in the combined company’s leadership, but they now accuse each other of trying to gain the upper hand.

Leonardo Del Vecchio, the founder of Luxottica who is now the largest shareholder and executive chairman, said Hubert Sagnieres, the executive vice chairman, would listen only to himself.

“Hubert Sagnieres only accepts what he himself has proposed, he refuses a proposal from anyone else, we’ve had to accept everything he does,” Del Vecchio told French newspaper Le Figaro.

“As soon as the first general assembly of the new group on Nov. 29, he behaved as if Essilor had bought Luxottica. He broke the (merger) pact signed in 2017,” Del Vecchio added.

With the division of power unclear, analysts say tensions could undermine the integration process at the group, whose stock has fallen over 5 percent since the start of the year while the broader CAC-40 index has gained nearly 15 percent.

Del Vecchio said that the 400 million-600 million euros in cost-savings the merger was expected to yield has fallen behind schedule, and is now expected over five years instead of three years as originally planned.

Reacting to comments from Del Vecchio and his holding firm, Delfin, a source close to Essilor said: “We learned with surprise and consternation about Delfin’s statement and Mr. Del Vecchio’s comment.” The source said further reaction would be given in coming days.

Tensions have flared up after Del Vecchio appeared to indicate in November that he wanted his right-hand man Francesco Milleri to get the CEO job - a prospect that irked the French side.

A spokesman for Del Vecchio said earlier this month that his comments should not be interpreted as an intention to appoint Milleri, but the bad blood remains.

Earlier, Delfin threatened in a statement to take action if its interests were not respected.

“Delfin reserves (the right) to take such actions as it will deem necessary or appropriate to protect its interest along with the interest of EssilorLuxottica and its stakeholders,” it said, without elaborating.

An EssilorLuxottica spokeswoman declined to comment.

With the group’s future leadership uncertain, it has recently started looking for a new chief executive who is to be appointed by the end of next year.

Reporting by Leigh Thomas; Addtional reporting by Matthias Blamont; Editing by Inti Landauro, Kirsten Donovan and Leslie Adler

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