EU: Essilor-Luxottica merger will require thorough antitrust vetting

The proposed merger of Italian spectacle maker Luxottica with French lens manufacturer Essilor will require thorough vetting by European antitrust authorities, the head of the bloc’s competition regulator said on Saturday.

Luxottica, the world’s biggest eyewear company whose brands include Ray-Ban and Oakley, agreed in January to a merger with Essilor, the biggest lensmaker, to create an industry giant with a market value of 47 billion euros ($56 billion), more than 15 billion euros in revenues and 144,000 staff.

The deal needs to clear antitrust hurdles in several countries and regions and if approved is expected to close around the end of the year.

The EU Commission was officially notified on August 22.

EU Competition Commissioner Margrethe Vestager said it was too early to say whether approval may require the companies to make significant concessions.

“These are companies that have very big market shares and also, when it comes to sunglasses and lenses for glasses, obviously this is an important market, it is a very valuable market so I cannot say,” she told Reuters on the sidelines of a business conference in Italy.

A negative reaction from Essilor’s customers to the merger, which the company said in July had affected its first-half sales, has raised concerns among analysts that the two companies may be required to take more substantial concessions to satisfy the competition regulators than initially anticipated.

Exane-BNP Paribas analysts said in a recent note the examination of the deal by EU competition authorities will include sounding out competitors, clients, and professional associations as well as reviewing possible complaints. “Hence our concern over the mounting pushback from customers, recently stressed by Essilor,” they said.

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