Italy consumer goods: Luxottica eyes China
FROM DIALOG NEWSEDGE
[TheDeal.com]
Luxottica Group SpA on Thursday, July 7, agreed to
acquire Xueliang Optical Technology Co. Ltd. for $25.3 million
including debt, the first in a series of expected Chinese buys for the Italian
eyewear giant.
Milan-based Luxottica suggested other deals are on the
horizon, saying it would continue to monitor the optical retail market in
China, which
Luxottica says is increasingly hospitable to upscale eyewear. Luxottica also
noted that
China's retail
eyewear market is fragmented but is growing up to triple the rate of most
developed markets.
'The acquisition is irrelevant from a financial point of
view,' said one Milan-based analyst who asked not to be named. 'But
strategically it is quite important, because it's the first step in constructing
a strong marketing and distribution presence there.'
The analyst says he expects Luxottica to pursue other small
acquisitions in
China, which
lacks a national eyewear retailer. 'They'll have to build it themselves,' he
said.
Xueling last year posted revenue of about 102 million
renminbi ($12.3 million) from its 79 stores in
Beijing. Luxottica already has 70
shops in Hong Kong that it bought when the Italian
company acquired Sydney-based retailer OPSM group Ltd. in 2003. Luxottica also
manufactures eyeglasses in
China.
Luxottica expects Chinese regulatory approval for the deal by
year's end.
The deal follows Luxottica's acquisition of Cole National
Corp. last year for $500 million. Hong Kong-based eyewear maker Moulin
International Holdings Ltd., Luxottica's rival for the Cincinnati-based
eyewear group at the time, pulled out when it was unable to secure financing. In
June, Moulin was placed under provisional liquidation, and some company managers
are being investigated for fraud.
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SOURCE: Dialog NewsEdge
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