EssilorLuxottica has reaffirmed its goal to complete the acquisition of optical retail giant GrandVision within the next 18 months following the announcement of a new investigation by the European competition watchdog.
On 6 February, the European Commission commenced an investigation into the proposed merger of EssilorLuxottica, the world’s largest supplier of ophthalmic lenses and eyewear, and GrandVision, Europe’s largest optical retail chain.
If approved, the deal, valued by financial analysts to be worth €7.2 billion (AU$11.6 billion), will see EssilorLuxottica drastically increase its footprint by more than 7,200 stores and 37,000 employees across 40 countries.
The commission is concerned the merger may reduce competition for the wholesale supply of ophthalmic lenses and eyewear, as well as for the retail supply of optical products.
GrandVision is described as a global eyewear retailer that operates some of the largest optical chains throughout Europe such as GrandOptical and Pearle. EssilorLuxottica sells its products to optical retailers, including GrandVision, which resell them to final consumers.
European Commission executive vice-president Ms Margrethe Vestager, who is in charge of competition policy, said the investigation would be conducted with consumers in mind.
“In this consolidating market, we need to carefully assess whether the proposed merger would lead to higher prices or reduced choices for consumers when they visit their local optician,” she said.
EssilorLuxottica is a French-Italian vertically integrated multinational corporation. The company was born out of a 2018 merger between lens French lens maker Essilor and Italian eyewear giant Luxottica.
The new entity is now based in Paris and forms the world’s largest supplier of eyewear with more than 9,100 retail stores globally (not counting GrandVision).
EssilorLuxottica and GrandVision acknowledged the European Commission’s Phase II review in a statement. So far, the transaction has been unconditionally cleared by the US, Russia and Colombia, and it is currently under review in Brazil, Chile, Mexico and Turkey.
“The parties are confident that Phase II will be completed in a timely manner and will closely cooperate with the European Commission to fully demonstrate the rationale of the proposed acquisition and the benefits that it will bring to customers, consumers and all the eyewear industry players,” a joint statement said.
“The companies reaffirm the shared objective to close the transaction within 12 to 24 months from the announcement date, July 31, 2019, in cooperation with the relevant authorities.”
