EssilorLuxottica Says GrandVision’s Move to Initiate Arbitration Proceedings Is ‘Surprising’ and a Distraction

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SCHIPHOL, The Netherlands—GrandVision NV (Euronext: GVNV) on Thursday initiated arbitration proceedings against EssilorLuxottica SA (Euronext: EL) in connection with the material breach notice EssilorLuxottica had sent to GrandVision in mid-July, according to a statement issued by the Dutch retailer. The latest salvo in the dispute between the partners in a proposed mega deal comes almost a year to the day after they announced a preliminary agreement under which EssilorLuxottica would acquire GrandVision in a deal valued at roughly €7.1billion, as VMAIL reported.

On July 18, EssilorLuxottica said it had started legal proceedings in the Netherlands to obtain information from GrandVision on how it performed during the coronavirus crisis, as VMAIL reported. The retailer—which owns the For Eyes optical business in the U.S.–had not been forthcoming in providing this information despite several requests, EssilorLuxottica said.

On Thursday, GrandVision fired back with its action to move some aspects of the dispute to arbitration.

“As previously announced, GrandVision strongly disagrees with EssilorLuxottica's claims,” the retailer’s statement said. “Therefore, GrandVision has initiated these arbitration proceedings to obtain confirmation that GrandVision is not in material breach of the support agreement concluded in connection with the envisaged sale by HAL Optical Investments BV of its 76.72 percent ownership interest in GrandVision to EssilorLuxottica.”

GrandVision also wants to ensure that EssilorLuxottica complies with its obligations under the Support Agreement, in particular regarding merger clearance processes, GrandVision said.

A GrandVision spokeswoman noted that the arbitration action is “a separate process, which has no impact on the timeline or outcome of the summary proceedings” filed by EssilorLuxottica in the District Court in Rotterdam. She also noted that arbitration is the dispute resolution forum “the parties have agreed upon for the transaction, or in the terms of the deal.”

In a separate announcement, EssilorLuxottica said it acknowledges notice of the arbitration action by GrandVision and HAL, but that it intends “to carry on with legal proceedings against” the two businesses.

“EssilorLuxottica regards these arbitration proceedings as a surprising and obvious attempt by HAL and GrandVision to detract from GrandVision’s breaches under the support agreement and its failure to provide EssilorLuxottica with required information,” the EssilorLuxottica statement noted. “EssilorLuxottica is acting in full compliance with the Block Trade Agreement and the support agreement and any suggestion to the contrary is baseless.”

In addition, EssilorLuxottica said it will “carry on with the summary legal proceedings it initiated in the Netherlands, to obtain information from HAL and GrandVision.”

A court hearing is scheduled for Monday, Aug. 10, and “to date, EssilorLuxottica is yet to receive the information it requested from GrandVision and HAL,” EssilorLuxottica noted in its statement.