European Commission - Press release for accepted merger ............................
Mergers: Commission clears merger between Essilor and Luxottica
European Commission - Press release
Brussels, 1 March 2018
The European Commission has approved under the EU Merger Regulation the proposed merger between Essilor and Luxottica, two leaders in the optical industry. The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Our job is to ensure that a merger won't lead to higher prices or reduced choices. In this case for opticians and consumers in the EU. We've received feedback from nearly 4,000 opticians in a market test in Europe that Essilor and Luxottica would not gain market power to harm competition. As the result of the market test did not support our initial concerns we can let this merger go ahead unconditionally.
Today's decision follows an HTTP://EUROPA.EU/RAPID/PRESS-RELEASE_IP-18-1442_EN.HTM of the proposed merger between Essilor and Luxottica. Essilor is the largest supplier of ophthalmic lenses, both worldwide and in Europe. Luxottica is the largest supplier of eyewear, both worldwide and in Europe, and has well-known brands in its portfolio such as Ray-Ban and Oakley. Both companies sell their products to opticians who then sell finished spectacles and sunglasses to consumers.
The Commission's investigation Essilor and Luxottica mainly sell complementary optical products, which do not compete with each other. The Commission opened an in-depth investigation to assess whether the merged company might use Luxottica's powerful brands to make opticians buy Essilor lenses and exclude other lens suppliers from the markets, through practices such as bundling or tying.
During its investigation, the Commission received feedback from nearly 4 000 opticians throughout Europe. The investigation found that:
- Luxottica's strongest brands in frames and sunglasses, including Ray-Ban, are generally not essential products for opticians. This conclusion is consistent with Luxottica's market share of less than 20% in frames in Europe and with the fact that a sizable number of optical stores in Europe do not sell any Luxottica products.
- The merged company would not be able to exploit any market power in sunglasses to shut out competing suppliers of lenses from the market. Sunglasses are mostly sold without visual correction and account for a small portion of opticians' revenues.
- The merged company would have limited incentives to engage in practices such as bundling and tying because of the risk of losing customers. Moreover, even if it followed such practices, this would be unlikely to marginalise competing suppliers of lenses and harm effective competition.
- The merged company would not be able to exclude rival eyewear suppliers from the market, since Essilor has insufficient market power and incentives to shut out Luxottica's competitors.
- There were no competition concerns due to the elimination of emerging competition, since Luxottica's limited activities in lenses and Essilor's limited activities in eyewear were unlikely to play an important role for competition in the foreseeable future.
Therefore, the Commission concluded that the transaction would raise no competition concerns in the EEA or any substantial part of it.
Given the worldwide scope of the companies' activities, the Commission cooperated closely with other competition agencies, including in particular the US Federal Trade Commission, as well as the competition authorities of Australia, Brazil, Canada, Chile, China, Israel, New Zealand, Singapore, South Africa and Turkey.
Companies and products
Essilor, headquartered in France, mainly manufactures and sells ophthalmic lenses and markets them to opticians worldwide. Its flagship brands are Varilux, Crizal, Transitions, Eyezen, and Xperio. Essilor also sells optical machines, optical instruments and eyewear, and operates optician retail businesses, mainly outside of Europe.
Luxottica, headquartered in Italy, designs, manufactures and distributes prescription frames and sunglasses. Its portfolio includes own brands such as Ray-Ban, Oakley and Persol as well as more than 15 licensed brands including Armani, Chanel, Dolce & Gabbana, Prada and Versace. Luxottica also operates optician retail businesses, mainly in the US but also in Italy through Salmoiraghi & Viganò, in the UK through David Clulow and worldwide through Sunglass Hut.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
There are currently five ongoing phase II merger investigations: Press contacts:
• Ricardo CARDOSO (+32 2 298 01 00)
• Maria SARANTOPOULOU (+32 2 291 37 40)
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email
• Ricardo CARDOSO (+32 2 298 01 00)
• Maria SARANTOPOULOU (+32 2 291 37 40)
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email
More information will be available Press contacts:• Ricardo CARDOSO (+32 2 298 01 00)
• Maria SARANTOPOULOU (+32 2 291 37 40)
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email
source:
http://europa.eu/rapid/press-release_IP-18-1442_en.htm
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The $49 billion transaction is expected to close by June 30..........................
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