Essilor-Luxottica merger requires thorough vetting...................................

[Chris Ryser]

SEPTEMBER 2, 2017 / 1:19 PM / 9 HOURS AGO

EU's Vestager says Essilor-Luxottica merger requires thorough vetting

CERNOBBIO, Italy (Reuters) - The proposed merger of Italian spectacles maker Luxottica (LUX.MI) with French lens manufacturer Essilor (ESSI.PA) will require thorough vetting by European antitrust authorities, the head of the bloc’s competition watchdog said on Saturday.

Luxottica, the world’s biggest eyewear company whose brands include Ray-Ban and Oakley, agreed in January a merger with Essilor, the biggest lens maker, 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 if approved is expected to close around the end of the year.
The EU Commission was officially notified on Aug. 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 the Ambrosetti 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 would 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.


A ‘vertical integration’ between two companies operating at different stages of the production chain is normally less worrying for competition watchdogs than a “horizontal” merger boosting a firm’s market share. But a vertical tie-up can still risk blocking rivals’ access to suppliers or buyers, a process known as ‘foreclosure’.

Vestager said a careful examination was necessary given the size of the two companies.

“Even if it is a vertical integration,when you have market shares of this kind, in the high double digits, of course we have to be thorough in our analysis to make sure you don’t foreclose,” she said.

Also asked about possible competition hurdles for the purchase of the troubled Ilva steel plant in southern Italy by ArcelorMittal (MT.AS), the world’s biggest steelmaker, Vestager said it was a “very tricky case” but good cooperation so far with the Italian authorities boded well for the approval process ahead.

($1 = 0.8434 euros)



Source:
https://www.reuters.com/article/us-l...-idUSKCN1BD0OY

[lensmanmd]

Let's not forget that Essilor has a big chunk of the lab equipment pie via SatisLoh. There are 3 major players in the Wholesale Freeform production platform, with Coburn trying to take a portion of that pie. If Essilor continues its march forward, Schneider and OptoTech may lose market share based on the virtual optical monopoly that Essilor/Luxottica will enjoy.

[Chris Ryser]

New Zealand antitrust body clears Luxottica-Essilor merger

By Reuters
PUBLISHED: 11:15 BST, 5 September 2017 | UPDATED: 11:15 BST, 5 September 2017
00:0000:05


MILAN, Sept 5 (Reuters) - New Zealand's Commerce Commission, the country's competition watchdog, has given the green light to a merger between Italian spectacles maker Luxottica and French lens manufacturer Essilor International, it said on its website.

* The merger is "unlikely to substantially lessen competition in New Zealand," Commission Chairman Mark Berry said in a post on the website.

* "Competition is strong and we believe the merged entity will be sufficiently constrained by the presence of existing competitors with the ability to expand at all levels of the supply chain and in all relevant markets," the commission said.

• Luxottica, the world's biggest eyewear company, agreed in January a merger with Essilor, the biggest lens maker, to create an industry giant with a market value of about 47 billion euros and more than 15 billion euros in revenue.*
• The deal needs to clear antitrust hurdles in several countries and if approved is expected to close around the end of the year. (Reporting by Claudia Cristoferi; Writing Francesca Landini; Editing by Mark Potter)

source:
http://www.dailymail.co.uk/wires/reu...or-merger.html