By Matthew Dalton 

PARIS -- The eyewear giant that owns Ray-Ban, LensCrafters and dozens of other brands is in turmoil as a public fight broke out between top executives over control of the company, just six months after they created it in a merger of equals.

Shares of EssilorLuxottica SA, the world's leading eyewear company with more than EUR16 billion ($18.26 billion) in annual revenue, fell 6.6% on Thursday in Paris after a top executive, the Italian billionaire Leonardo Del Vecchio, accused other executives of violating the pact that created the company out of France's Essilor and Italy's Luxottica. Mr. Del Vecchio was the controlling shareholder of Milan-based Luxottica and owns 31% of the new company.

The merger -- announced in 2017 and completed last year -- made Mr. Del Vecchio executive chairman of EssilorLuxottica and Hubert Sagnières, the chief executive of Essilor, the new company's executive vice chairman. The two men would have equal powers to run the combined company, EssilorLuxottica said.

On Wednesday, Mr. Del Vecchio said in an interview with the French newspaper Le Figaro that Mr. Sagnières was taking consequential decisions at EssilorLuxottica without his approval. "Hubert Sagnières only accepts what he himself proposes," Mr. Del Vecchio said. "He is acting as if Essilor bought Luxottica."

On Thursday, Mr. Sagnières fired back, saying it was Mr. Del Vecchio who was unilaterally trying to control the company.

"A certain number of his actions reflects a de facto attempt to take control of the new Group, without any premium offered to shareholders," Mr. Sagnières said.

The public quarrel at the top of a globe-spanning corporation highlights the perils of a merger that doesn't give clear control to either side. The merger specified that Luxottica and Essilor will be maintained as companies inside the merged company, each with their separate boards of directors. "Decisions relating to the management of the company shall be made jointly by, or with the approval of both" Messrs. Del Vecchio and Sagnières, according to EssilorLuxottica's rules of procedure.

The two men engineered the merger to capitalize on growing global demand for eyewear. Along with Ray-Ban and LensCrafters, Luxottica makes sunglasses for fashion brands and owns retail outlets such as the Sunglass Hut. Essilor produces lens under brand names such as Transitions and Varilux.

Tensions have been simmering between the two men for months. Mr. Del Vecchio last year sought to appoint his right-hand man, Francesco Milleri, the chief executive of Luxottica, as CEO of the combined company. Mr. Sagnières wanted to hire a headhunting firm to find a new CEO.

The disagreement has left the combined company without a chief executive for months. Mr. Del Vecchio on Wednesday said it would take five years, not three as initially planned, to realize EUR400-600 million in annual synergies from the merger.

He also said Mr. Sagnières last year hired managers for the new company without his knowledge, signing them to permanent work contracts that offered "golden parachute" severance payments. "I only found out about it two weeks ago," he said. "That's how Hubert works."

Write to Matthew Dalton at Matthew.Dalton@wsj.com

 

(END) Dow Jones Newswires

March 21, 2019 15:24 ET (19:24 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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