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Police enter two Brazil prisons after rioting leaves 27 inmates dead

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NewsHubTwenty-seven inmates have died in eruptions of violence in two northern Brazilian prisons, officials said Sunday as they quelled the latest in a string of prison disturbances across the country in which more than 100 people have died within two weeks.
State security officials said fighting between rival gangs broke out Saturday at the adjacent Alcacuz and Rogerio Coutinho lockups near the city of Natal in the Rio Grande do Norte state.
Officials waited until dawn Sunday before entering to try to re-impose control, said state security chief Caio Cesar Bezerra.
“This way we guaranteed a calm intervention … without resistance from the inmates,” Bezerra said.
President Michel Temer expressed concern over the rebellion Sunday through his official Twitter page, saying he had been following the situation closely.
Like many prisons across the country, Alcacuz is overcrowded, with more than 1,000 inmates crammed into a facility meant for 620.
The recent outbreak of prison violence began on Jan. 1-2, when 56 inmates were killed in the northern state of Amazonas. Authorities said the Family of the North gang targeted members of Brazil’s most powerful criminal gang, First Command, in a clash over control of drug-trafficking routes in northern states. Many of the dead were beheaded and dismembered. Four others died at a smaller prison.
Then on Jan. 6, in the neighboring state of Roraima, 33 prisoners were killed, many with their hearts and intestines ripped out.
Experts say First Command is exploiting overcrowding and squalid conditions in the penitentiaries to expand its reach across the national prison system.
Meanwhile, the prison chief for the southern state of Parana, Luiz Alberto Cartaxo, told Brazil’s Globonews network that 21 inmates escaped from the Piraquara prison there on Sunday after using explosives to break through the prison wall. He said two other inmates died in a confrontation with police while trying to flee.
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The Chargers are moving to L. A., Obama’s legacy: part 1, California’s drought conditions have improved in the northern part of the state, and Sean McVay, the new Los Angeles Rams coach , becomes the youngest NFL head coach in modern history.
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The family of 16-year-old Jose Mendez, who was fatally shot by the LAPD last year, released surveillance video of the February 2016 shooting.
Donald Trump’s independent streak was on vivid display at Wednesday’s news conference. Is the great California drought finally calling it quits? Michelle King has made no big waves in her first year running Los Angeles Unified. A state watchdog agency is investigating political donations connected to real estate developer Samuel Leung.
This article was originally posted at 4 a.m.

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© Source: http://www.latimes.com/la-fg-brazil-prisons-20170115-story.html
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Donald Trump, attack me on Twitter, please

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NewsHubDean Obeidallah, a former attorney, is the host of SiriusXM radio’s daily program „The Dean Obeidallah Show“ and a columnist for The Daily Beast. Follow him @TheDeansreport. The opinions expressed in this commentary are his.
(CNN) On Saturday, President-elect Trump went after civil rights icon Rep. John Lewis, a man millions of Americans rightly admire for his courage and principles. Lewis had commented Friday that he didn’t view Trump as a „legitimate“ president since in his view „the Russians participated in helping this man [Trump] get elected. “
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Prisoners beheaded in latest Brazil jail bloodbath

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NewsHubIt’s good to be home. My fellow Americans, Michelle and I have been so touched by all the well-wishes we’ve received.
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Natal – The latest in a string of brutal prison massacres involving suspected gang members in Brazil has killed 26 inmates, most of whom were beheaded, officials said on Sunday.
The bloodbath erupted on Saturday night in the overcrowded Alcacuz prison in the northeastern state of Rio Grande do Norte.
Similar violence at other jails in Brazil left around 100 inmates dead in early January.
„Twenty-six deaths have been verified,“ the state’s public safety manager, Caio Bezerra, told a news conference. The authorities had earlier estimated around 30 were killed as they gathered bodies and body parts, he said.
Security forces stormed the prison at dawn and restored order after 14 hours of violence, the local authorities said.
Officials said members of two drug gangs clashed violently after coming out of different parts of the prison.
One family member said the authorities did not seem to be doing everything they could — even after she warned the prison director.
„The (prison) director even said he could not do anything“ when told an uprising was looming, said Adriana Feliz, the sister an inmate.
„I told the director they were going to go in and kill everyone in Pavillion 4,“ she added. „So why didn’t they do anything? “
President Michel Temer said on Twitter that the federal government stood ready to provide „all assistance necessary. “
Separately, officials in the southern state of Parana said 28 prisoners escaped from a jail in the city of Curitiba after inmates blew up a wall and fired on police.
– Prisoners armed –
At Alcacuz, security forces surrounded the prison but had to wait until first light Sunday to storm the site with armored vehicles, officials said.
Prisoners had cut off the electricity and were said to have firearms.
The prison, just outside the state capital Natal, was built for a maximum of 620 inmates but currently houses 1,083, the state justice department said.
The riot was thought to have been a clash between Brazil’s biggest drug gang, the First Capital Command (PCC), and a group allied to its main rival Red Command, Brazilian media said.
Experts say the violence is part of a war between drug gangs battling for control of one of the world’s most important cocaine markets and trafficking routes.
Drug gang wars
Violence in the first week of January left around 100 prisoners dead – many of them active gang members, the authorities said.
Many of the victims were beheaded, disemboweled or dismembered, officials said.
The biggest bloodbath, in the northwestern city of Manaus, left about 60 inmates dead. It appeared to be an orchestrated mass killing targeting members of the PCC. Dozens of inmates are still missing.
A second bout of violence in Roraima state killed 33.
It was thought to be a backlash by the PCC’s rivals for its violent expansion.
The states of northern Brazil, which border top cocaine producers Bolivia, Colombia and Peru, are battle zones in the drug trade.
Prisons there – and throughout Brazil – are often under the de facto control of drug gangs, whose turf wars on the outside play out among inmates.
Overcrowding
Overcrowding exacerbates the problem, activists say.
Brazil’s inmate population has been swollen by efforts to crack down on the drug trade.
The country’s jails hold 622 000 inmates, mostly young black men, according to a 2014 justice ministry report. It found that 50 percent more capacity was needed.
Brazil has the world’s fourth-largest prison population after the United States, China and Russia, according to the report.
Temer is under pressure over the issue.
After the two riots earlier this month, he announced the federal government would spend $250 million to build new prisons.
But human rights activists and experts questioned whether more prisons are the answer.
Brazil needs „medium- and long-term policies to reduce the vulnerability of certain social groups, to prioritize prevention rather than repression,“ sociologist Camila Nunes of the Federal University of ABC in Sao Paulo told AFP after the previous prison massacres.
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Trump Snaps Back At CIA’s Brennan, Asks If He Was Leaker Of ‘Fake News’

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NewsHubGOP President-elect Donald Trump ratcheted up his war with the intelligence community Sunday by asking if CIA Director John Brennan himself was responsible for leaking a dossier of unverified information to the press about Trump’s alleged escapades in Russia.
After Brennan appeared on “Fox News Sunday” to call Trump’s comparison of the intelligence community to Nazi Germany “outrageous,” Trump fired of a series of tweets, in which he questioned whether Brennan was personally behind BuzzFeed’s recent publication of a 35-page dossier of totally unverified information on Trump.
“What I do find outrageous is equating intelligence community with Nazi Germany,” Brennan said earlier on Sunday. “I do take great umbrage with that and there is no basis for Mr. Trump to point fingers at the intelligence community for leaking information that was already available publicly.”
Brennan said during that same interview that “there is no interest in undermining the president-elect.”
But Trump doesn’t appear convinced, despite statements from Brennan and also from Director of National Intelligence James Clapper earlier this week that the intelligence community had nothing to do with the leak of the dossier , which BuzzFeed published last Tuesday. BuzzFeed has since been widely castigated for publishing the completely unverified dossier full of bizarre information about Trump’s alleged, scandalous activities in Russia.
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Controversial megachurch pastor Eddie Long dies at 63

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NewsHubBy John Blake and Chandrika Narayan
(CNN) — Bishop Eddie Long, the controversial leader of one of the nation’s largest megachurches, has died, according to the suburban Atlanta church he presided over. He was 63.
Long died after a battle with an aggressive form of cancer, according to a statement by the New Birth Missionary Baptist Church.
Long was a national figure and one of the most innovative and polarizing pastors in the contemporary church. He was also a paradox.
He was a preacher who led an infamous march against same-sex marriage and denounced homosexuality, but he also settled a lawsuit by four young men who said he pressured them into sexual relationships.
He was a man who wore tight muscle shirts and radiated self-confidence but used to throw up before sermons because he was so nervous.
He was a man who gave away cars and paid the college tuition of needy people, but he also was investigated by Congress after a charity he created had provided him with a million-dollar home and a Bentley luxury car.
“When he spoke, black people all over the country listened to him,” said Shayne Lee, a sociologist who studies the black Pentecostal church. “He was part of the repackaging of Christianity for post-civil rights African-Americans.”
Long’s wife, who stood by him through his rise and fall from national fame, released a statement.
“Although his transition leaves a void for those of us who loved him dearly, we can celebrate and be happy for him, knowing he’s at peace,” Vanessa Long said.
Rise and fall
At its peak New Birth Missionary Baptist Church had about 25,000 members. The church was such a glamorous Sunday stop it became dubbed “Club New Birth.”
But to limit Long’s impact to the black church understates his influence.
He spoke before Congress, visited President Clinton in the White House and became a popular figure in white Pentecostal circles. His church hosted Coretta Scott King’s funeral service in 2006.
Though Long dressed like a middle-aged hip-hop star, he once said the figure who led him to his greatest religious awakening was Jimmy Swaggart, the charismatic white pastor.
But it was Long’s ministry to young men that first marked his rise. At a time when the traditional church had trouble attracting young men, Long called himself a “spiritual daddy” to wayward teenagers. He played basketball and lifted weights with his male ministers.
Long’s relationship with his own father, though, was far from ideal. His father, Floyd Long, was a stern Baptist minister who was known as “the cussing preacher” because of his pugnaciousness. Long said in one interview that his father was distant and didn’t attend his football games or even his high school and seminary graduation.
“My daddy pulled back when it came to touching you and saying, ‘I love you,’ ” Long said. “I needed that so badly.”
It was Long’s relationship to men, though, that virtually destroyed his ministry. In 2010, he and his church reached an out-of-court settlement in a lawsuit filed by four young men who accused him of pressuring them into sexual relationships while they were members of his congregation. The terms of the settlement were not disclosed.
Long, who preached passionately against homosexuality for years, denied the allegations.
In 2011, Vanessa Long filed for divorce. Shortly afterward, Long told his followers he was taking some time off to work on his marriage.
“I do want you to know that this is, for me and my family, especially with me, one of the most difficult times and things I’ve had to face, and only because my strength, other than God, is in Miss Vanessa,” he said at the time.
“And I want you to rest assured that I love her and she loves me. … In all the things that I’ve ever had to deal with and being pastor, my rock has been to be able to come home to a virtuous woman who always had peace in my house… We’re going (to) work it out.” he said.
More controversy
The couple later reconciled, but Long’s ministry never recovered from the accusations. Membership at New Birth plummeted.
“It was a fall from grace,” Lee, the sociologist, told CNN. “He had a national reach. He lost that reach with that scandal.”
The lawsuit was not the first time that public controversy swirled around Long. In 2005, the Atlanta Journal Constitution revealed that a charity Long had created to help the needy had made him its biggest beneficiary.
The charity’s compensation to Long included a $1.4 million, six-bedroom, nine-bath home on 20 acres and more than $1 million in salary. Long defended the charity at the time.
“We’re not just a church, we’re an international corporation,” Long said at the time. “We’re not just a bumbling bunch of preachers who can’t talk and all we’re doing is baptizing babies. I deal with the White House. I deal with Tony Blair. I deal with presidents around this world. I pastor a multimillion-dollar congregation.
“You’ve got to put me on a different scale than the little black preacher sitting over there that’s supposed to be just getting by because the people are suffering.”
Despite his public setbacks, Long retained a loyal following to the end.
In recent months, rumors swirled about Long’s health after he lost a dramatic amount of weight and appeared frail in public. But even as his once-stocky frame withered, he continued to go before his church to ask for prayers and to claim victory.
On New Year’s Eve at his church, an emaciated Long addressed his congregation, according to the Atlanta Journal Constitution.
“God ain’t through with me and sometimes you need to see the skinny Eddie and the big Eddie and all that,” he said, his once-powerful voice reduced to a raspy whisper. “It ain’t got nothing to do with physical appearance, it’s what in your heart … You are a Scripture … I want to see you struggle, I want to see you fight the devil and get victory.”
Long is survived by his wife, four children and three grandchildren, the church said.
CNN’s Alex Medeiros also contributed to this story.

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Trump vows ‘insurance for everybody’ in Obamacare replacement plan

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NewsHubPresident-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody,” while also vowing to force drug companies to negotiate directly with the government on prices in Medicare and Medicaid.
Trump declined to reveal specifics in the telephone interview late Saturday with The Washington Post, but any proposals from the incoming president would almost certainly dominate the Republican effort to overhaul federal health policy as he prepares to work with his party’s congressional majorities.
Trump’s plan is likely to face questions from the right, after years of GOP opposition to further expansion of government involvement in the health-care system, and from those on the left, who see his ideas as disruptive to changes brought by the Affordable Care Act that have extended coverage to tens of millions of Americans.
In addition to his replacement plan for the ACA, also known as Obamacare, Trump said he will target pharmaceutical companies over drug prices.
“They’re politically protected, but not anymore,” he said of pharmaceutical companies.
The objectives of broadening access to insurance and lowering health-care costs have always been in conflict, and it remains unclear how the plan that the incoming administration is designing — or ones that will emerge on Capitol Hill — would address that tension.
In general, congressional GOP plans to replace Obamacare have tended to try to constrain costs by reducing government requirements, such as the medical services that must be provided under health plans sold through the law’s marketplaces and through states’ Medicaid programs. House Speaker Paul D. Ryan (R-Wis.) and other Republicans have been talking lately about providing “universal access” to health insurance, instead of universal insurance coverage.
Trump said he expects Republicans in Congress to move quickly and in unison in the coming weeks on other priorities as well, including enacting sweeping tax cuts and beginning the building of a wall along the Mexican border.
Trump warned Republicans that if the party splinters or slows his agenda, he is ready to use the power of the presidency — and Twitter — to usher his legislation to passage.
“The Congress can’t get cold feet because the people will not let that happen,” Trump said during the interview with The Post.
Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.).
“It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said. He noted that he is waiting for his nominee for secretary of health and human services, Rep. Tom Price (R-Ga.), to be confirmed. That decision rests with the Senate Finance Committee, which hasn’t scheduled a hearing.
Trump’s declaration that his replacement plan is ready comes after many Republicans — moderates and conservatives — expressed anxiety last week about the party’s lack of a formal proposal as they held votes on repealing the law. Once his plan is made public, Trump said, he is confident that it could get enough votes to pass in both chambers. He declined to discuss how he would court wary Democrats.
So far, Republicans have taken the first steps toward repealing the law through budget reconciliation, a process by which only a simple majority is needed in the Senate. The process would enable them to dismantle aspects of the law that involve federal spending.
The plan that Trump is preparing will come after the House has taken more than 60 votes in recent years to kill all or parts of the ACA to kill to adopt more conservative health-care policies, which tend to rely more heavily on the private sector.
“I think we will get approval. I won’t tell you how, but we will get approval. You see what’s happened in the House in recent weeks,” Trump said, referencing his tweet during a House Republican move to gut their independent ethics office, which along with widespread constituent outrage was cited by some members as a reason the gambit failed.
As he has developed a replacement package, Trump said he has paid attention to critics who say that repealing Obamacare would put coverage at risk for more than 20 million Americans covered under the law’s insurance exchanges and Medicaid expansion.
“We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” People covered under the law “can expect to have great health care. It will be in a much simplified form. Much less expensive and much better.”
Republican leaders have said that they will not strand people who gained insurance under the ACA without coverage. But it remains unclear from either Trump’s comments in the interview or recent remarks by GOP leaders on Capitol Hill how they intend to accomplish that.
For conservative Republicans dubious about his pledge to ensure coverage for millions, Trump pointed to several interviews he gave during the campaign in which he promised to “not have people dying on the street.”
“It’s not going to be their plan,” he said of people covered under the current law. “It’ll be another plan. But they’ll be beautifully covered. I don’t want single-payer. What I do want is to be able to take care of people,” he said Saturday.
Trump did not say how his program overlaps with the comprehensive plan authored by House Republicans. Earlier this year, Price suggested that a Trump presidency would advance the House GOP’s health-care agenda.
When asked in the interview whether he intends to cut benefits for Medicare as part of his plan, Trump said “no,” a position that was reiterated Sunday on ABC by Reince Priebus, Trump’s incoming chief of staff. He did not elaborate on that view or how it would affect his proposal. He expressed that view throughout the campaign.
Timing could be difficult as Trump puts an emphasis on speed. Obama’s law took more than 14 months of debate and hundreds of hearings. To urge lawmakers on, Trump plans to attend a congressional Republican retreat in Philadelphia this month.
Moving ahead, Trump said that lowering drug prices is central to reducing health-care costs nationally — and that he will make it a priority as he uses his bully pulpit to shape policy. When asked how exactly he would force drug manufacturers to comply, Trump said that part of his approach would be public pressure “just like on the airplane,” a nod to his tweets about Lockheed Martin’s F-35 fighter jet, which Trump said was too costly.
Trump waved away the suggestion that such activity could lead to market volatility on Wall Street. “Stock drops and America goes up,” he said. “I don’t care. I want to do it right or not at all.” He added that drug companies “should produce” more products in the United States.
The question of whether the government should start negotiating how much it pays drugmakers for older Americans on Medicare has long been a partisan dispute, ever since the 2003 law that created Medicare drug benefits prohibited such negotiations.
Trump’s goal is uncertain, however, with respect to Medicaid, the insurance for low-income Americans run jointly by the federal government and states. Under what is known as a Medicaid “best price” rule, pharmaceutical companies already are required to sell drugs to Medicaid as the lowest price they negotiate with any other buyer.
On his plan for tax cuts, Trump said that “we’re getting very close” to putting together legislation. His advisers and Ryan met last week and have been working from his campaign’s plan and from congressional proposals to slash current rates. “It’ll probably be 15 to 20 percent for corporations. For individuals, probably lower. Great ­middle-class tax cuts,” Trump said.
On corporate tax rates, “We may negotiate a little, but we want to bring them down and get as close to 15 percent as we can so we can see a mushrooming of jobs moving back.”
Trump said he would not relent on his push for increasing taxes on U. S. companies that manufacture abroad — and insisted that the upcoming tax cuts should be enough reason for companies to produce within the United States.
“If companies think they’re going to make their cars or other products overseas and sell them back into the United States, they’re going to pay a 35 percent tax,” he said.
Briefly touching on immigration, Trump said that building a border wall and curbing illegal immigration remain at the top of his to-do list and that he is spending significant time looking at ways to begin projects, both with Congress and through executive action. He did not disclose what was to come on those fronts.

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Report: Netanyahu brokered billionaires to invest in Yediot newspaper

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NewsHubAnother addition to the seemingly endless drip of leaks regarding Prime Minister Benjamin Netanyahu’s ongoing corruption investigation materialized on Sunday night, this time with reports that Netanyahu attempted to broker billionaire investors to help his supposed arch rival, Yediot Aharonot publisher Arnon “Noni” Mozes, cope with his paper’s financial difficulties – in exchange for skewing the newspaper coverage in favor of the prime minister.
According to the report on Channel 2, Netanyahu set up meetings between Mozes and Israeli billionaire Arnon Milchan and Australian billionaire James Packer, both of whom are already suspects in a separate case of having given Netanyahu gifts that constitute breach of trust. The report also named Oracle CEO Larry Ellison and German media conglomerate Axel Springer as potential investors.

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Sen. Rand Paul is drafting a new health care plan to replace the ACA

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NewsHubSen. Rand Paul, R-Ky., said he’s drafting legislation for a health insurance plan that could replace the Affordable Care Act, including a provision to “legalize” the sale of inexpensive insurance policies that provide abbreviated coverage.
“That means getting rid of the Obamacare mandates on what you can buy,” Paul said in an interview on CNN’s “State of the Union” on Sunday. Obamacare, which Republicans are moving to repeal, requires insurers to cover a number of procedures — such as preventive care and pregnancy — that Paul said drives up the cost.
The Kentucky Republican said he’ll propose helping people pay for medical bills through tax credits and health savings accounts, which allow users to set aside money tax-free to pay for medical expenses. His bill would allow individuals and small businesses to form associations when buying insurance, giving them more leverage, he said.
“There’s no reason why someone with four employees shouldn’t be able to join with hundreds and hundreds of other businesses” to negotiate better prices, Paul said. Becoming part of larger pools would help small companies secure coverage “that guarantees the issue of the insurance even if you get sick.”
President-elect Donald Trump made the repeal of the Affordable Care Act a central component of his 2016 campaign. The Senate and House adopted a budget resolution late last week that would help pave the way for repealing the act, President Barack Obama’s signature domestic policy achievement.
Paul said his legislation is meant to address concern among Democrats and some Republicans that ending Obamacare would also end health care coverage for many of the 20 million people who acquired insurance under the law. While Republicans move ahead with their plans to eradicate Obamacare, they have yet to outline an alternative.
“It’s incredibly important that we do replacement on the same day as we do repeal,” Paul said on CNN. “Our goal,” he added, is to “give access to the most amount of people at the least amount of cost.”
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Pound falls ahead of Theresa May Brexit speech

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NewsHubThe pound dropped below $1.20 on Sunday ahead of a key speech from Theresa May on Brexit this week.
Sterling hit its lowest level against the dollar since October’s flash crash before later edging back up slightly.
Analysts said traders were reacting negatively to reports that the prime minister would signal plans on Tuesday to quit the EU single market.
The pound has now fallen about 20% against the dollar since the referendum to lows last regularly seen in 1985.
The pound also dropped to a two-month low against the euro on Sunday, falling more than 1% to about €1.13.
It comes as US President-elect Donald Trump said in an interview with The Times that the fall in the pound was „great“ for British business.
Mr Trump suggested his Scottish golf course in Turnberry had benefited from the fall in the value of sterling, and that „business is unbelievable in a lot of parts in the UK“.
A weaker pound helps make UK firms more competitive abroad, but it also makes foreign holidays and imported goods more expensive.
Several of Sunday’s newspapers claimed Mrs May would this week outline a „hard Brexit“ approach, a term used to imply prioritising migration controls over single market access.
Downing Street has described this as „speculation“.
The currency movement, though, was „clearly another political drop for sterling“, said Jasper Lawler, an analyst at London Capital Group.
„The pound is now back into flash crash territory,“ Mr Lawler added.
The flash crash on 7 October saw the pound drop to its lowest post-referendum level – below $1.19 – before recovering.
Reports of the UK leaving the single market are „like kryptonite“ to traders who back the pound, said Kathleen Brooks, an analyst at City Index.
„The FX market has spoken, and, as of Sunday night, it is not confident that Theresa May can deliver the necessary clarity and confidence when she lays out her Brexit plans in a speech on Tuesday,“ Ms Brooks said.
Even though Mrs May has been linked to a „hard Brexit“ approach before, it is seen by many traders as a downside for the pound, and so every headline can „generate another wave of selling“, she added.
Laith Khalaf, an analyst at Hargreaves Lansdown, said: „The pound is tethered to expectations of a hard or soft Brexit. “
Analysts at Societe Generale said many in the market believe it likely the UK will leave the single market, because of Mrs May’s determination to have control over immigration and not to be subject to the European Court of Justice.
„The question then becomes just how close a trade arrangement the UK will be able to obtain,“ they added.
The pound has been volatile since the Brexit vote, partly due to uncertainty about the economic impact if the UK gives up its tariff-free access to the EU.
Trading in sterling can be more volatile in Asian markets, when key sterling counter traders in London and other important Western markets are not operating.
A report on Friday said October’s flash crash, which came during Asian trading, was due to a range of factors, including the time of day.

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Luxottica, Essilor in 46 billion euro merger deal to create eyewear giant: Sources

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NewsHubItaly’s Luxottica and France’s Essilor have agreed a 46-billion euro ($49 billion) merger deal to create a global powerhouse in the eyewear industry, two sources with knowledge of the matter said.
The deal, one of Europe’s largest cross-border tie-ups, is expected to be announced before the market opens on Monday. It brings together Luxottica, the world’s top spectacles maker with brands such as Oakley and Ray Ban, with Essilor, the world’s leading manufacturer of ophthalmic lenses.
The deal will see Luxottica’s 81-year old founder, Leonardo Del Vecchio, take a 31 percent stake in the merged group through his family holding Delfin, becoming the biggest shareholder in the company, one of the sources said.
That source described the tie-up as a „merger of equals. “ Luxottica has a market value of around 24 billion euros, compared to Essilor’s 22 billion euros, giving the merged group a combined market capitalization of 46 billion euros.
The two companies‘ combined revenues totaled nearly 16 billion euros in 2015 and together they employed some 140,000 people.
The second source said the merged group would be headquartered in Paris and listed on the Paris stock exchange.
The fast-growing eyewear market was valued at around $100 billion in 2015, according to U. S.-based market consulting company Grand View Research. It is expected to keep expanding at a healthy pace in coming years because of an ageing population as well as increasing awareness about eye care and vision problems, with Latin America and Asia seen as key markets for growth.
The Financial Times reported that Del Vecchio would become executive chairman of the merged group and Essilor’s chairman and chief executive, Hubert Sagnieres, 60, will become executive vice-chairman.
Luxottica has been dogged by management upheaval in recent years, raising questions over Del Vecchio’s succession plans and strategy. Some insiders have said a merger could help settle such issues.
Luxottica announced in January 2016 the departure of its third chief executive in 17 months when Adil Mehboob-Khan, a former Procter & Gamble executive, stepped down and Del Vecchio tightened his grip on the group by taking on executive powers.
Long-standing CEO Andrea Guerra quit in 2014 following a rift with Del Vecchio. His successor, Enrico Cavatorta, left after only six weeks into the job, also because of differences with Del Vecchio.
Through Delfin, Del Vecchio, who founded Luxottica in 1961, owns 62 percent of the group, which had revenues of 9 billion euros in 2015, according to Luxottica’s website. Fashion designer Giorgio Armani has a 5 percent stake in the Italian group.
Luxottica cut its full-year outlook in July, blaming uncertain markets, as global security threats cloud the outlook for tourism and consumer spending.
The group said in September 2014 that a deal with Essilor had been explored about a year and a half earlier but was not pursued at the time because the right conditions were not in place.
Back then, it cited shareholding governance issues among the reasons why the deal had not gone ahead. In March and April last year, Luxottica denied press reports of a possible tie-up with Essilor and Germany’s Carl Zeiss , saying the only relationship it had with the two groups was that they both were among its suppliers.
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