Brussels (AFP) – The EU on Tuesday launched an in-depth probe into the proposed merger between French lens-maker Essilor and Luxottica, the Italian eyewear company that produces Ray-Ban and Oakley sunglasses.
The European Commission, the bloc’s executive arm and regulator, said it was concerned the proposed deal, which would create a new global giant in the sector, “may reduce competition for ophthalmic lenses”.
The investigation had been widely expected. As soon as the merger was announced in January, analysts highlighted possible reluctance by competition authorities over a deal that would bring together a major lens producer with a leading manufacturer of frames.
“Half of Europeans wear glasses and almost all of us will need vision correction one day,” the commission’s anti-trust chief Margrethe Vestager said in a statement.
“Therefore we need to carefully assess whether the proposed merger would lead to higher prices or reduced choices for opticians and ultimately consumers.”
The commission said it was concerned that the merged company could use Luxottica’s powerful brands to convince opticians to buy Essilor lenses and cut other lens-makers out of the market.
The probe will look at whether this could have negative effects for consumers, such as less choice or higher prices. The commission has 90 working days — until February 12 next year — to reach a decision on the deal.
The deal had been expected to conclude late this 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.
Essilor and Luxottica said the review was to be expected given their size, and pledged to “closely cooperate with the European Commission to fully demonstrate the rationale of the proposed combination and the benefits that it will bring to customers, consumers and all the eyewear industry players.”
They said they were confident the probe would be completed in a “timely manner” and “reaffirm the objective to close the transaction around the end of the year.”
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.