EU Opens Investigation Into Essilor-Luxottica Merger -- Update

By Emre Peker Features Dow Jones Newswires

The European Union's antitrust authority said Tuesday it started an investigation into the proposed merger between Ray-Ban maker Luxottica Group SpA and optical-lens maker Essilor International SA, which would create a global eyewear colossus.

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The deal -- announced in January and poised to forge a firm with a combined market value of around EUR46.3 billion ($54.5 billion) -- threatens to exclude other lens suppliers from markets, according to the EU's executive arm, the European Commission.

Essilor is the largest supplier of ophthalmic lenses while Luxottica is the top provider of eyewear both in Europe and across the world, the EU said. The bloc's competition authority said it is concerned that their combination could result in bundling or tying practices that harm rivals.

"The merged entity may use Luxottica's powerful brands to convince opticians to buy Essilor lenses and exclude other lens suppliers from the markets," the EU said.

In a joint statement, Essilor and Luxottica said they were confident that the review "will be completed in a timely manner." The companies said they will cooperate with EU authorities to demonstrate the "benefits that [the merger] will bring to customers, consumers and all the eyewear industry players."

The companies said they expect the complete their transaction around year-end, adding that authorities in Russia, India, Colombia, Japan, Morocco, New Zealand, South Africa and South Korea had already cleared the deal.

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EU officials have 90 working days to reach a decision, which sets a Feb. 12 deadline for the review. The authorities said their probe "does not prejudge the outcome."

"We need to carefully assess whether the proposed merger would lead to higher prices or reduced choices for opticians and ultimately consumers, " European Competition Commissioner Margrethe Vestager.

France-based Essilor and Luxottica of Italy would merge in a complex share swap, which would remove the risk of stepping on each other's toes as Luxottica expanded into lens manufacturing and Essilor moved into frames.

The combined companies will dominate the global eyewear market, putting them far ahead of other competitors, such as Johnson & Johnson Inc. and Safilo Group SpA, according to Euromonitor.

Write to Emre Peker at emre.peker@wsj.com

(END) Dow Jones Newswires

September 26, 2017 13:00 ET (17:00 GMT)