The European competition watchdog has cleared EssilorLuxottica’s acquisition of Europe’s largest retail optical chain GrandVision, on the condition that around 350 stores are divested across three countries.
EssilorLuxottica – the world’s largest supplier of ophthalmic lenses and eyewear that also has around 9,000 retail locations globally – confirmed on Tuesday 23 March that the European Commission (EC) had approved the takeover after a lengthy in-depth review largely impacted by COVID-19.
The original deal, valued by financial analysts to be worth €7.2 billion (AU$11.2 billion), was expected to see EssilorLuxottica drastically increase its footprint by more than 7,200 stores and 37,000 employees across 40 countries.
However, when the commission commenced its inquiry in February 2020 it was 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.
As a result, EssilorLuxottica revealed this week’s EC clearance stipulated a condition to offload approximately 350 optical retail businesses in Belgium, the Netherlands and Italy.
In Belgium, the GrandOptical chain and its 35 stores will be sold but without the brand name. The purchaser will have a license while rebranding these stores to its own choice of name.
In Italy, the merged entity will divest 174 stores, which includes the whole of EssilorLuxottica’s VistaSì chain together with 72 stores from the ‘GrandVision by’ chain. The VistaSì brand will be transferred and the ‘GrandVision by’ stores will either be rebranded to VistaSì or to the purchaser’s own brand.
In the Netherlands, 142 stores from the EyeWish chain will be sold, together with the brand name. The merged entity will keep some stores from this chain and will have to rebrand them under a new name.
According to EssilorLuxottica, the outcome of the proposed transaction is still dependant on the sign off from competition authorities in Chile and Turkey, as well as the decisions regarding ongoing litigations.