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By Cristina Roca
The two warring sides of EssilorLuxottica SA (EL.FR) have broken a monthslong deadlock on a governance dispute and struck a peace deal just a few days before the company's annual general meeting takes place on Thursday.
The optical company and its main shareholder Delfin said Monday that they have signed a settlement agreement and that all legal disputes between them will be dropped.
EssilorLuxottica Chairman Leonardo Del Vecchio and Vice-Chairman Hubert Sagnieres agreed to give powers to the chief executives of the Essilor and Luxottica businesses, Laurent Vacherot and Francesco Milleri respectively, to work on a strategy and integration process at EssilorLuxottica within the next 12 to 24 months. Mr. Vacherot and Mr. Milleri have signed off on key staff appointments to lead the company's central functions, the company said.
Investors welcomed the news: At 0714 GMT, shares in EssilorLuxottica traded 4.4% higher at EUR115.05.
EssilorLuxottica's chair and vice-chair share, under the terms of the merger of Essilor and Luxottica last October, equal powers. They have been locked in a governance dispute for months, delaying the delivery of synergies from the combination of the two businesses as well as the search for a CEO for the new company.
Mr. Vacherot has been appointed a director on the company's board, replacing Bernard Hours, who resigned from his post. Mr. Milleri was already a board member. This leaves the power balance at EssilorLuxottica's board, where Essilor and Luxottica each control eight seats, unchanged.
The board of EssilorLuxottica confirmed the search for a new chief executive and Mr. Milleri and Mr. Vacherot told the board they would not run for the position, the company said.
As a result of the decision, Valoptec, the association of EssilorLuxottica shareholders, has withdrawn its proposal to appoint an additional director on the company's board, which was to be voted on during the shareholders' meeting on Thursday.
The agreement ends all existing claims and legal proceedings between EssilorLuxottica and Delfin, the holding of Mr. Del Vecchio, who merged his Luxottica business with Essilor via a complex share-swap that ended with him holding 31% of voting rights in EssilorLuxottica through Delfin.
Write to Cristina Roca at firstname.lastname@example.org; @_cristinaroca
(END) Dow Jones Newswires
May 13, 2019 03:44 ET (07:44 GMT)
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