Luxottica to Buy Oakley for $2.1 Billion

NEW YORK (June 21) -- Luxottica Group, the world's biggest eyewear maker, said Wednesday it would buy U.S. sunglasses maker Oakley Inc. in an all-cash deal worth about $2.1 billion.

Luxottica, an Italian company whose brands include Ray-Ban and Prada, said the combination would offer enhanced economies of scale and an opportunity to create new eyewear categories.

Luxottica will buy all the outstanding shares of Oakley for $29.30 per share, the companies said in a joint statement.

The offer represents a 16.1 percent premium to Oakley's Wednesday close of $25.23 on the New York Stock Exchange.

Milan-based Luxottica expects the deal to lead to savings of about $134 million over the next three years. It will fund the deal from operating cash flow, available credit, and credit facilities to be available at the closing.

The deal has been unanimously approved by both boards of directors, and the companies expect the deal to close in the second half of 2007.

Oakley, based in Foothill Ranch, California, has been scaling back its apparel and footwear lines, while beefing up its optics portfolio. This year it bought Eyewear Safety Systems, a company that supplies protective eyewear to the military, law enforcement and firefighters.

Last year, Oakley bought luxury brand Oliver Peoples and retail chain The Optical Shop of Aspen, while launching a women's optical line.