China’s nod paves way for French-Italian eyewear merger

Beijing (AFP) – China on Thursday announced it had approved the proposed merger between French lens-maker Essilor and Luxottica, the Italian eyewear company that produces Ray-Ban and Oakley sunglasses.

Beijing was one of the final hurdles for the tie-up between the two eyewear giants and its ruling likely paves the way for the deal’s completion.

China was one of five key markets whose approval the two companies set as a condition for completing the tie-up in order to ensure that the merged entity would face no hurdles in them.

The deal had already been cleared by the authorities in the other markets -– the EU, US, Canada and Brazil.

But China’s State Administration for Market Regulation attached a list of conditions to its approval.

The combined company cannot sell eyewear products at prices below cost without justifiable reasons, the announcement said, adding several other restrictions for the merged company’s operations in China.

When the merger was announced in January 2017, analysts had warned of possible reluctance by competition authorities over a deal that would bring together a major lens producer with a leading manufacturer of frames.

The European Union approved the merger in March, leaving China’s unpredictable authorities as the remaining hurdle.

The deal had been expected to conclude late last year or early 2018, creating a combined group to be known as EssilorLuxottica, with annual sales of more than 15 billion euros ($17.7 billion) and a market value of nearly 50 billion euros. 

Founded in 1961, Luxottica owns the Ray-Ban, Oakley and Sunglass Hut brands and licences for designer frames such as Giorgio Armani, Chanel and Ralph Lauren.