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Over the last week in Italy financial and non-financial papers have written extensively about the hostile takeover of Mediaset by Vivendi, an Italian media and television company. But what does one actually know about Vivendi?

Vivendi is a huge French multinational mass media company based in Paris. It has invested in many different industries across its history like television, movies, video games and telecommunications. The French-based company has as its main shareholder with 30% voting rights Group Bollorè, which is managed by the French billionaire Vincent Bollorè.

For the last quarter (ended on September 30th, 2016), Vivendi reported an astonishing €10.86bn in revenues (trailing twelve months) and an EBITDA of €845m. Due to its extensive economic and financial power, Vivendi was able, throughout its history, to perform many M&As in different industries, some of which have not been that friendly. Some examples are: Gameloft (bought 96% of the company), Ubisoft (25.15%), Telecom Italia (24.6%), Mediobanca (8%) and the latest one is Mediaset (25.7%)

As a matter of fact, after a failed agreement in the summer, when the company led by Vincent Bollorè was supposed to buy a 100% stake in Mediaset Premium (digital terrestrial service provided by Mediaset), the two companies ended up in court after Mediaset sued Vivendi. It seemed that the two companies were not going to do business together, at least until December 13th, when Vivendi decided to become one of the major shareholders of Mediaset, growing its stake from 3% to almost the 30% in about a week.

Fininvest, a company controlled by the Berlusconi family and Mediaset main shareholder, tried to protect itself against the takeover by increasing its stake to 39.775%.

The intention of Bollorè is probably to make a deal from a much stronger position, while Fininvest is taking time with its legal team in order to find a solution, that, accordingly to some experts, could involve the acquisition of some put & call, in order to increase Fininvest's stake to 5% over the next few months.

The importance of Mediaset in the Italian economy and the fact that this company is owned by the former prime minister Silvio Berlusconi and still active in politics shifted the discussion from the financial markets to the political arena.

As a matter of fact, on the one hand, Lorenzo Guerini deputy secretary of the ruling centre-left Democratic party said that:

"The government would have to explore actions to ensure the safety of an Italian asset".

On the other hand, the exponents of the anti-establishment Five-Star Movement said that, in their opinion, a state intervention would be "completely inappropriate" as Mediaset is not a strategic asset for Italy or at least it is less strategic than Telecom, of which Vivendi became freely the major shareholder in June 2015.

The question now is what is going to happen in the future to Mediaset the answer right now is far from clear, but in the next months, the strategy of Vivendi and Fininvest will become more apparent.

In addition, it is going to be interesting to see how this situation affects the Italian political class, which is in the middle of post-referendum discussions and the rescue of Monte dei Paschi di Siena.

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Vivendi: What Lies Beneath The Aggressive Acquisition Strategy - The Market Mogul

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Over the last week in Italy financial and non-financial papers have written extensively about the hostile takeover of Mediaset by Vivendi, an Italian media and television company. But what does one actually know about Vivendi? Vivendi is a huge French multinational mass media company based in Paris.

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http://www.strategyand.pwc.com/trends/2016-chemicals-industry-trends

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McDonald’s US sales fall amid concerns over home market strategy

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McDonald’s US sales fall amid concerns over home market strategy

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http://newsonahand.com/mcdonalds-us-sales-fall-amid-concerns-over-home-market-strategy

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Safran to Buy Plane-Cabin Specialist Zodiac Aerospace for $9 Billion

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Safran to Buy Plane-Cabin Specialist Zodiac Aerospace for $9 Billion

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http://www.marketwatch.com/story/safran-agrees-to-buy-zodiac-aerospace-2017-01-19-14854639

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https://www.technologyreview.com/s/601876/teslas-strategy-is-risky-and-aggressive-but-it-has-worked/

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http://www.lesechos.fr/industrie-services/immobilier-btp/0211721902733-nexity-va-muter-en-plate-forme-de-services-a-limmobilier-2059389.phphttp://www.lesechos.fr/industrie-services/immobilier-btp/0211721902733-nexity-va-muter-en-plate-forme-de-services-a-limmobilier-2059389.php

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US Sales drop sparks fears on McDonald's revival plan

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US Sales drop sparks fears on McDonald's revival plan

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Financial Times: 24 January 2017

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Netflix Beats Subscriber Count Target By 36%

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Netflix Beats Subscriber Count Target By 36%

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http://www.forbes.com/sites/petercohan/2017/01/19/netflix-beats-subscriber-count-target-by-36-as-growth-strategy-pays-off/#2541ca06792a

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https://www.bloomberg.com/news/articles/2017-01-15/luxottica-essilor-agree-to-50-billion-euro-merger-ft-reports

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Samsung confirms battery faults as cause of Note 7 fires

http://www.bbc.co.uk/news/business-38714461

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http://www.lemonde.fr/economie/article/2017/01/21/bouygues-telecom-connecte-les-campagnes-a-l-internet-grace-a-la-4g_5066560_3234.html

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https://www.bloomberg.com/news/articles/2017-01-19/toyota-chairman-says-fuel-cell-cars-need-longer-time-to-catch-on

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https://www.washingtonpost.com/news/business/wp/2016/09/14/bayer-and-monsanto-merge-in-mega-deal-aimed-at-domi-worlds-food-supply/?utm_term=.b87220f3203c

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https://tiresandparts.net/news/parts/bmw-expand-cooperation-daimler-purchase-parts/

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A merger is the latest sign of Big Tobacco’s resilience

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A merger is the latest sign of Big Tobacco’s resilience

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Bat announced it is buying the rest of Reynolds and it will create the world's largest listed company!!

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BRITISH AMERICAN TOBACCO (BAT) announced on January 17th a final deal to buy Reynolds American for $49bn. BAT already owns 42% of Reynolds; buying the rest of it will create the world's largest listed tobacco company by sales and profits. It will peddle brands such as Dunhill, Camel and Newport. The casual observer might imagine the deal to be a frantic bid to revive an ailing industry. On the contrary. Cigarettes may kill you, but the big companies that make them are rather healthy.

That is despite a decline in smoking rates. In 2015 just over a fifth of adults smoked, estimates the World Health Organisation, down from almost a quarter ten years earlier. This drop hardly helps companies, but it isn't ruinous either.
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Smoking is still popular in certain spots. More than three-quarters of men light up in Indonesia, for example. The habit is becoming more common among men in Africa and the eastern Mediterranean (see chart). And though global smoking rates have fallen, population growth means that about 1.1bn people still smoke, roughly as many as did in 2005. This, combined with rising prices, means that the value of retail sales jumped by 29% in the decade to 2015, according to Euromonitor, a data firm.

The gravest threat to big cigarette makers comes from rivals. Indeed, this week's deal increases the chance that Altria, which sells Marlboro in America, will be bought by Philip Morris International, which sells Marlboro elsewhere and is the industry's leader to date-a scary prospect even for a merged BAT and Reynolds.

Regardless of whether their rivals' deal proceeds, the merger of BAT and Reynolds has clear logic. The firms claim it could save at least $400m each year. Reynolds will also give BAT access to America, a market that once looked repulsively litigious but now seems stable. Companies still operate under a vast settlement reached with American states in 1998, but separate class-action suits have turned out to be less costly than feared.

New regulations have not snuffed out tobacco firms, either. Countries have passed a battery of laws to fight smoking, including taxes and bans on advertising and on smoking in pubs. Tobacco companies have fought these ferociously, suing countries such as Australia for prohibiting logos on cigarette packs, for example. But some rules had hidden benefits. Bans on advertising lower marketing costs and make it harder for young upstarts to challenge established brands.

Electronic cigarettes would seem another existential threat. But they increasingly appear to be an opportunity. Large tobacco firms are investing in such "reduced-risk" products, as they term them. New requirements for e-cigarettes in Europe and America, finalised last year, may also hinder smaller companies' ability to innovate. That could help Big Tobacco gain even greater market share: large firms may be the only ones with resources to navigate complex rules.

Companies are particularly bullish on new products that heat tobacco, without burning it. These gadgets are more satisfying to smokers than e-cigarettes, which contain nicotine but no tobacco, so may encourage more smokers to switch. Cigarette executives claim that would be a health boon: just heating tobacco avoids much of the nasty stuff that comes with combustion.

Less encouraging for health is the prospect that some smokers might switch to the new products rather than give up tobacco completely. For years companies have sold to a shrinking share of the population. If enough would-be quitters switch to "safer" cigarettes instead, firms could slow or even reverse what had seemed a permanent downward trend. Far from fading away, Big Tobacco might be on the verge of a new boom.

If so, the company formed by BAT and Reynolds stands to gain, as it will combine the two firms' research into reduced-risk products. That will help it compete against Philip Morris, which has spent nearly twice as much on research as BAT. Philip Morris is now seeking approval in America to market its heated tobacco product as safer than traditional cigarettes; it submitted its application to American regulators in December. The firm already reckons the product might add $1bn in profit by 2020. André Calantzopoulos, Philip Morris's chief executive, describes a possible future in which his giant cigarette company phases out cigarette sales.

Many health advocates view such declarations sceptically. For now, combustible products still account for almost all of cigarette firms' revenue. And tobacco remains responsible for more than one in nine of all adult deaths.

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A merger is the latest sign of Big Tobacco's resilience

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BRITISH AMERICAN TOBACCO (BAT) announced on January 17th a final deal to buy Reynolds American for $49bn. BAT already owns 42% of Reynolds; buying the rest of it will create the world's largest listed tobacco company by sales and profits. It will peddle brands such as Dunhill, Camel and Newport.

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American regulators investigate Fiat Chrysler for emissions cheating

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American regulators investigate Fiat Chrysler for emissions cheating

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http://www.economist.com/news/business/21714989-italian-american-carmaker-regulators-headlights-american-regulators-investigate-fiat

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http://www.independent.ie/business/world/premium-brand-strategy-helps-pg-up-earnings-35387253.html

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Alibaba buys into retail stores strategy

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Alibaba buys into retail stores strategy

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http://newsonahand.com/alibaba-buys-into-retail-stores-strategy/

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http://uk.businessinsider.com/middle-eastern-us-airlines-dispute-future-of-air-travel-2015-7?r=US&IR=T

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American Apparel opened its first stores in 2003, with locations in Echo Park, New York and Montreal. Within three years, it had mushroomed into a global chain with more than 140 locations in 11 countries. By 2009, that figure had doubled to 281 stores.

It was, founder Dov Charney once boasted, "the fastest retail roll-out in American history."

After filing for bankruptcy protection for the second time last year, the company sold its brand and some manufacturing equipment this month to Canadian clothing maker Gildan Activewear for $88 million. Its remaining 110 stores are expected to close by April.

It was a "real estate strategy that initially worked," said Peter Lynch, a partner at A&G Realty Partners. "But then with all this other competition you had to deal with, the productivity of those stores dropped."

The company lacked an overall retail strategy backed by testing different markets around the country. Charney, who was intimately involved in every aspect of the business, picked locations based more on instinct and recommendations from friends, said Ilse Metchek, president of the California Fashion Assn. "There was no strategy whatsoever," she said.

But American Apparel ended up opening too many stores too close together in some of the highest rent areas in the country. In 2008, for example, American Apparel had 16 stores in Manhattan alone. Many stores clustered in expensive areas failed to generate enough sales to justify the high rents, analysts said.

"You can't have that many stores in the same city in a small radius," said Jessica Ramirez, retail research analyst at Jane Hali & Associates.

Ramirez said she used to have five American Apparel shops within walking distance from her New York office. That can work, she said, if the stores set themselves apart with a different mix of products to entice shoppers - something American Apparel failed to do.

"It was the same thing over and over again," she said.

In an interview, Charney disputed that the number, location and funding of stores posed problems and said "almost all the stores were profitable" at the time he was ousted in 2014. He said the company was forced to take on debt after it fired more than 1,500 skilled workers in 2009 when an immigration inspection uncovered questionable employment documents.

"We racked up a lot of debt not for the stores but because we were trying to transition" after the immigration audit toward hiring and training new staff and dealing with a drop in production, he said. "Store productivity was one of the highlights of American Apparel at the time of my firing."

However, by 2008, same-store sales - an important gauge of stores that have been open for at least a year - had plunged 10%. The company flirted with filing for bankruptcy protection as about $101 million of its long-term debt, taken on in part to fuel its store expansion, came close to maturing.

The twin problems of mounting debt and falling sales continued to plague the company, as additional crises hit. In 2013, a disastrous start at the company's new distribution center in La Mirada - which suffered inventory mix-ups and delayed orders - ultimately cost American Apparel an additional $15 million in expenses and lost sales.

In early 2014, Charney's share of American Apparel plunged to 27% from 43% after the company issued new shares to cover an interest payment due on a bond. That ultimately gave the board enough wiggle room to oust him as chairman, and later chief executive, citing allegations of sexual misconduct with employees and misuse of company funds.

A year later, American Apparel - which was still stuck with crippling debts and interest payments - filed for Chapter 11 bankruptcy protection for the first time.

That cut down its debts, but analysts also were expecting the company to shutter many under-performing stores. American Apparel did close some, but not as many as it should have, analysts said.

"They could have done it then - get out of the bad stores and consolidate the merchandise," Metchek said. "But they wouldn't do it."

Metchek said she doesn't think the stores alone were a death knell for the company, which was plagued by other pressing problems. She points to the board's refusal to adequately fund the turnaround plan following its bankruptcy as the final nail that sealed the company's fate. After Charney's firing, 90%-off sales were instituted storewide, which caused sales to plunge and inventory to be depleted on the most popular items, she said.

Other retailers, including Gap and Macy's, have survived having too many locations, she said, in part by closing stores and revamping their merchandise. But history has not been kind to those that failed to keep pace with changing shopper preferences or let their retail business stagnate, such as Wet Seal, which is reportedly filing for bankruptcy again after filing for Chapter 11 last year and closing 300 stores, and the Limited, which began closing all 250 of its stores this month.

"The mantra of more and more stores," she said, "obviously some chains have survived it."

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American Apparel rapidly grew its retail footprint. Did that strategy contribute to its collapse?

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American Apparel opened its first stores in 2003, with locations in Echo Park, New York and Montreal. Within three years, it had mushroomed into a global chain with more than 140 locations in 11 countries. By 2009, that figure had doubled to 281 stores.

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IT MAY be an exaggeration to talk of French firms "colonising" corporate Italy. Some Italian business leaders nonetheless fret about expansionists from across the northern border plucking control of some of their most celebrated local firms. Family-run companies, especially, can make tempting prospects: ones that make excellent products but struggle to grow, or that face agonising succession problems, are notably juicy targets.

The latest example, announced this week, is the merger between Luxottica, an Italian maker of fancy specs, and Essilor, a spiffy French producer of lenses. Together they will produce an entity with a market value of at least €46bn ($49bn), 140,000 staff and annual revenues of €15bn. The deal, one of the largest cross-border tie-ups attempted by European firms, had long been expected by industry watchers. The idea is to produce an entity that combines Italian style and skills in marketing with deft French engineering.
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The new firm will be listed on the Paris bourse (as probably its eighth-largest firm) later this year. That will mark the culmination of a long campaign by Essilor to arrange a merger. The founder and owner of Luxottica, Leonardo Del Vecchio, now 81 years old, had long resisted. But he now gushes that "two products which are naturally complementary, namely frames and lenses, will be designed, manufactured and distributed under the same roof."

His change of heart may stem from the problem of arranging for a successor. The company he founded in 1961 is widely lauded and owns global brands such as Ray Ban, Oakley and Sunglass Hut. Mr Del Vecchio himself rose from poverty (he spent some of his childhood in an orphanage) to become Italy's second-richest man, worth some €20bn. Yet for all his strengths, he could not foster a strong alternative leader and would not let any of his children (from various marriages) become managers. Colleagues felt squeezed out, seeing the boss as reluctant to delegate. One ex-employee says "90% of top management" abandoned the company in recent years.

The deal with Essilor is thus a way out, even if Mr Del Vecchio is not stepping down yet. Through his family trust, Delfin, he will be the largest shareholder in the merged entity (potentially with 38% of it) and its "executive chairman and chief executive" for the next few years. But Essilor's boss, Hubert Sagnières, who is 61 and will share equal managerial duties of the new entity, looks well placed to take charge once Mr Del Vecchio retires.

Building a bigger company looks possible. Some savings will come from knitting two teams of managers together. The global eyewear market, already worth some €90bn, is alluring. It is expected to grow as cohorts of middle-class consumers in Asia, especially, find they need eyesight correction and develop a liking for specs as accessories or protection against ultraviolet rays.

An amicable merger hardly ranks as a French assault on Italy. But it does come in the context of other Franco-Italian tie-ups. In luxury goods, for example, French conglomerates with deep pockets, notably LVMH and Kering, have been acquiring smaller Italian rivals for years. French firms first grew faster by attending to flourishing markets for accessories such as handbags. Then they paid handsomely to take over prominent Italian brands, including Gucci, Bulgari and Fendi.

The French are active in other sectors, too. Vincent Bolloré, a swaggering billionaire who is determined to grow in Italy, last year led his firm, Vivendi, to buy nearly a quarter of Telecom Italia. (Unconfirmed rumours say he might sell to another French operator, Orange.) The daring Frenchman is also pushing Vivendi in a second bold bid, for Mediaset, a company in which Silvio Berlusconi, a former Italian prime minister, and his family are the biggest owners. Vivendi now owns nearly 29% of Mediaset.

In retailing, too, a pair of French supermarket chains, Auchan and Carrefour, together operate more than 2,000 supermarkets in Italy's unusually fragmented industry. Given that many businesses in Italy are run by ageing, first-generation founders with no clear plan for succession, more targets are bound to attract buyers from its neighbour to the north.

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A continental merger between Luxottica and Essilor fits a pattern

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IT MAY be an exaggeration to talk of French firms "colonising" corporate Italy. Some Italian business leaders nonetheless fret about expansionists from across the northern border plucking control of some of their most celebrated local firms. Family-run companies, especially, can make tempting prospects: ones that make excellent products but struggle to grow, or that face agonising succession problems, are notably juicy targets.

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Essilor and Luxottica have agreed to a $49 billion merger

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Essilor and Luxottica have agreed to a $49 billion merger

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French lensmaker Essilor International SA agreed to buy Luxottica Group SpA, the maker of Ray-Ban sunglasses, for about 22.8 billion euros ($24 billion) in stock, combining the largest manufacturer and retailer in eyewear.

Leonardo Del Vecchio, who created Luxottica in 1961 and controls 62 percent of its stock, will be executive chairman and chief executive officer of the combined business, which will be named EssilorLuxottica, the companies said Monday in a . Essilor CEO Hubert Sagnieres, 61, will be executive vice chairman and deputy CEO with powers equal to Del Vecchio's. Essilor shares gained as much as 19 percent while Luxottica rose as much as 15 percent.

Source: Luxottica Group SpA

Four years after talks began, the 81-year-old Italian billionaire said he's achieving his dream of combining the two businesses, creating one company that's strong in lenses, frames and eyeglass retailing. The deal also solves a protracted succession puzzle for Luxottica, which has had difficulty retaining top , with two CEOs resigning in 2014. Del Vecchio has said he didn't want to bring any of his into the company.

"This operation would be a perfect fit on paper as both groups are leading their respective categories," said Cedric Rossi, an analyst at Bryan Garnier & Co. "Nevertheless, two main question marks remain at this stage: EssilorLuxottica might face antitrust barriers, and management appointments in newcos are quite complicated."

The deal is the largest acquisition ever of an Italian company by a foreign buyer, according to data compiled by Bloomberg, and it adds to a string of such takeovers that has shrunk Italy's roster of multinational corporations. ChemChina bought tiremaker Pirelli & C. SpA in 2015 and the Pesenti family last year ceded control of cement producer Italcementi SpA to Germany's HeidelbergCement AG. Luxottica is Italy's fourth-largest publicly traded company by market value.

The companies described the transaction as a combination rather than an acquisition of Luxottica by Essilor. In addition to the two top executives sharing power, Del Vecchio's Delfin investment company and Essilor will each nominate eight directors for the combined company's 16-member board and the equity of EssilorLuxottica will be about 50 percent owned by each company's shareholders.

Luxury Brands

Luxottica makes frames for such as Armani, Chanel, and Prada, and is the biggest eyeglass retailer, with chains including Lenscrafters, Pearle Vision and Sunglass Hut. Essilor is No. 1 in lenses, and also has been expanding in eyewear retailing via .

The transaction should generate cost savings and increased revenue of 400 million euros to 600 million euros a year within about three to four years, Sagnieres said. The combined company will have more than 15 billion euros in annual revenue. Del Vecchio, Italy's , will be the single largest shareholder, controlling a stake of between 31 and 38 percent.

"This is a merger where they will be able to complement each other and create economies of scale on the supply chain," said Catherine Lim, a Bloomberg Intelligence analyst. "Luxottica is a licensee of major branded eyewear while Essilor has been more focused on making lenses."

EssilorLuxottica will be able to overcome antitrust hurdles, because its combined revenue would only account for about 16 percent of the market, Del Vecchio said on a call with analysts. However, the new company will have more than 50 percent of the sunglasses market and be the largest maker of spectacle frames, lenses and ready-made reading glasses, according to Jasmine Seng, an analyst at Euromonitor.

Delisting Luxottica

Delfin will sell each of its Luxottica shares to Essilor in exchange for 0.461 of an Essilor share. Essilor, based in Charenton-le-Pont near Paris, will then begin an offer for the remaining Luxottica stock at the same exchange ratio, with a goal of delisting the Italian company. Mediobanca SpA advised Delfin, while Citigroup Global Markets and Rothschild worked for Essilor.

The bid values Milan-based Luxottica at 47.07 euros a share based on Friday's closing price for Essilor, 5 percent lower than where Luxottica finished the week. Luxottica had a market value of about 24 billion euros as of Friday, with about 22 billion euros for Essilor.

Essilor shares surged 13 percent to 115.25 euros at 2:45 p.m. in Paris, lifting the value of the takeover to about 53.13 euros per Luxottica share. Luxottica climbed 8.8 percent to 53.90 euros.

Luxury Competitor

Luxottica increasingly competes with large luxury players such as Kering in a global eyewear industry worth about $121 billion last year, according to data from Euromonitor. The company's into lenses is attractive amid rising consumer demand and as the segment offers high margins, according to Bloomberg Intelligence.

Demand for eyewear is expanding in emerging markets with more than 2.3 billion people in Asia, Africa and Latin America needing optical frames, according to Exane BNP Paribas.

The two companies had been on a "collision course," Exane in a note in October as Luxottica moved into lens manufacturing while Essilor advanced into frames and acquired online eyewear retailers. Lens manufacturing will be a big deal for Luxottica as it makes it independent for sun and prescription lenses, it said.
- With assistance by Sonia Sirletti, Tommaso Ebhardt, Daryl Loo, and Maria Ermakova

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Essilor to Buy Ray-Ban Maker Luxottica for About $24 Billion

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French lensmaker Essilor International SA agreed to buy Luxottica Group SpA, the maker of Ray-Ban sunglasses, for about 22.8 billion euros ($24 billion) in stock, combining the largest manufacturer and retailer in eyewear.

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The company adopts a strategy that combines the 2 choices "low cost/differenciation": luxury at affordable prices
http://www.nouveautes-tele.com/49694-capital-m6-le-luxe-abordable-le-18-decembre-mauboussin-et-gemmyo-discounters.html

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MILAN/PARIS (Reuters) - Italy's Luxottica () and France's Essilor () have agreed a 46 billion euro ($49 billion) merger to create a global eyewear powerhouse with annual revenue of more than 15 billion euros.

The all-share deal is one of Europe's largest cross-border tie-ups and brings together Luxottica, the world's top spectacles maker with brands such as Ray-Ban and Oakley, with leading lens manufacturer Essilor.

"Finally ... two products which are naturally complementary -- namely frames and lenses -- will be designed, manufactured and distributed under the same roof," Luxottica's 81-year-old founder Leonardo Del Vecchio said in a statement on Monday.

Shares in Luxottica were up by 8.6 percent at 53.80 euros by 1405 GMT (9:05 a.m. ET), with Essilor up 12.2 percent at 114.60 euros.

The merger between the top players in the 95 billion eyewear market is aimed at helping the businesses to take full advantage of expected strong demand for prescription spectacles and sunglasses due to an aging global population and increasing awareness about eye care.

Jefferies analysts estimate that the market is growing at between 2 percent and 4 percent a year, while Luxottica and Essilor say that at least 2.5 billion people in the world still suffer from uncorrected vision problems.

The deal also removes -- for now at least -- uncertainty over succession at Luxottica, which has lost three CEOs since 2014 because of rifts with Del Vecchio.

"The strategic rationale is strong," JPMorgan Cazenove analysts said in a note, adding that the deal defuses the risk of growing competition between two groups that had been encroaching on each other's areas of expertise in recent years, with Essilor buying online retailers and Luxottica investing in lens manufacturing.

ONLINE FOCUS

Both companies have been grappling with slowing sales growth, hit by weakness in North America, and face rising competition from cheaper rivals and the challenge of online distribution.

While Asia and Latin America are seen by the companies as potential growth markets, e-commerce will also be a top priority.

Luxottica's third-quarter results had showed revenue from its online platforms grew by 18 percent, with the company stating that e-commerce had been targeted as an area for accelerated growth in 2017. The third-quarter e-commerce growth far exceeded that for overall sales, which rose by 1.4 percent at constant exchange rates.

The merger is expected to boost operating profit by up to 600 million euros in the medium term, the companies said.

It will also leave smaller rivals lagging even further behind. Dutch retailer GrandVision () and Italy's Safilo Group () had revenue of 3.2 billion euros and 1.3 billion euros respectively in 2015.

Though advisers on the deal have presented it as a merger of equals, Del Vecchio will be the biggest shareholder of the combined group with a stake of between 31 percent and 38 percent through his family holding company Delfin. Voting rights will be capped at 31 percent.

Analysts said that Essilor shareholders are getting a good deal because the share exchange ratio implies a 5 percent discount to Luxottica's closing price on Friday, which was down 27 percent from its 2015 peak.

Delfin will contribute its 62 percent stake in Luxottica at a ratio of 1 share in the Italian group for every 0.461 Essilor shares. The French lens maker will launch a mandatory exchange offer on all remaining Luxottica shares at the same ratio, with the aim of delisting Luxottica's shares.

TWIN BOSSES

The merged EssilorLuxottica will have 140,000 staff and will be headquartered and listed in Paris. It will also have a complex governance structure, with Del Vecchio and Essilor Chairman and CEO Hubert Sagnieres effectively sharing the driving seat, while the 16-strong board will have an even split of Essilor and Luxottica executives.

A source close to the deal said no arrangements had been made at this stage for when Del Vecchio will retire.

Del Vecchio, who returned to the helm of Luxottica two years ago after taking a back seat for the previous 10 years, will be CEO and executive chairman of the merged group. Sagnieres, 61, will serve as executive vice-chairman and deputy CEO, but he and Del Vecchio will have the same powers.

In a conference call with analysts, the two sought to play down concerns over the co-leadership.

"We have and share the same values, we have and share the same vision, we have and share the same interest in the product ... If we really want to provide consumers with the best product, Leonardo and I will have to co-manage," Sagnieres said.

Del Vecchio, who grew up as an orphan but is now Italy's second-richest person, said he had long dreamed of such a merger.

"This marriage will take place and will work," he said.

The deal is expected to close by the end of the year and Del Vecchio said he is confident there will be no problems gaining approval from competition authorities.

Luxottica and Essilor, which have a market value of about 24 billion euros and 22 billion euros respectively, had explored a possible tie-up a few years ago.

Luxottica said in September 2014 that discussions had taken place in 2013 but were dropped for a number of reasons, including shareholding governance issues.

A source close to the deal said that the two companies' business models, operations and strategy have converged since then and that the merger makes more sense now, given growing competition. The source said the tie-up had been agreed in the past six weeks.

Mediobanca advised Delfin on the merger, with Essilor advised by Rothschild and Citi.

Delfin's shareholders are Del Vecchio's six children and his second wife.

Additional reporting by Gianluca Semeraro and Claudia Cristoferi in Milan; Writing by Silvia Aloisi; Editing by David Goodman

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medical equipment : supplies and distribution (trbc)

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Luxottica and Essilor in 46 billion euro merger to create eyewear...

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MILAN/PARIS (Reuters) - Italy's Luxottica () and France's Essilor () have agreed a 46 billion euro ($49 billion) merger to create a global eyewear powerhouse with annual revenue of more than 15 billion euros. The all-share deal is one of Europe's largest cross-border tie-ups and brings together Luxottica, the world's top spectacles maker with brands such as Ray-Ban and Oakley, with leading lens manufacturer Essilor.