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Antitrust authority probe into Luxottica

03/12/2018
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Antitrust authorities are probing Luxottica’s newfound dominance in Italy’s sunglasses market after its €140 million (AU$225 million) takeover of sun lens manufacturer Barberini.

The June deal was followed by final confirmation in October that Luxottica, the world’s largest frame manufacturer, was was free to merge with France’s Essilor, the globe’s largest lens maker. However, the scale of both deals led the Italian Competition Authority to launch an investigation after, it claimed, the acquisition meant EssilorLuxottica and Barberini controlled 65–70% of the Italian sunglasses market.

Authorities wanted to study “the effects of the merger, knowing that the acquisition of Barberini will strengthen Luxottica’s position as the only vertically integrated operator present at all levels of the production chain up to the point of sale of glasses to the consumer.

“Barberini’s positioning ... leads one to believe that such a concentration could significantly hamper competition ... creating or strengthening a dominant position,” a document on the Italian antitrust website concluded.

Previously, European Union antitrust investigators examined how the Essilor-Luxottica deal would affect the market. The European Commission eventually allowed it to go ahead.

According to the Financial Times, EssilorLuxottica, with a combined market value of €50 billion (AU$78.27 b), was a test case for regulators, politicians and executives keen on creating so-called European champions.

Rivals, such as Germany’s Zeiss, argued that the combined group would flout antitrust limits.

Luxottica did not comment on the investigation.

Meanwhile, Essilor and Luxottica reported their third-quarter revenues separately, and will report fully integrated results from next year.

Essilor posted a 4.4% increase in revenue for its third quarter, up 5% like-for-like, to €1.8 billion (AU$2.82 b).

Luxottica’s third quarter sales were up by 3.5% at constant exchange rates and 2.9% at current rates. Its overall net sales were €2.21 billion (AU$3.56 b).

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