Essilor and Luxottica merger receives EU and US approval

Essilor has received further approvals without conditions for its proposed merger with Luxottica.

The European Commission (EC) and the Federal Trade Commission (FTC) in the US have closed their investigations of the deal, joining 13 other countries, including Canada, Australia and India, in approving the merger.

In a statement, Essilor said that the merger is planned for “the first part of 2018 after obtaining all necessary authorisations.”

Market test

The EU and US are both jurisdictions where antitrust approvals are a condition precedent to the closing of the deal. 

Investigations have taken place in the EU and US in order to establish if the merger would lead to less competition, higher prices, lower quality goods or services, or less innovation. 

The EC’s investigation assessed feedback from 4000 practitioners throughout Europe to establish whether the merged company would use Luxottica’s brands to make practitioners buy Essilor lenses and exclude other suppliers through bundling or tying methods. 

European commissioner and head of competition policy, Margrethe Vestager, said: “We’ve received feedback from nearly 4000 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.”

In the US, more than a million documents have been reviewed and over 100 market participants have been interviewed as part of the FTC’s investigation. 

In a statement, the FTC said: “FTC staff extensively investigated every plausible theory and used aggressive assumptions to assess the likelihood of competitive harm. The investigation exhaustively examined information provided by a wide and deep swathe of market participants, as well as the parties’ own documents and data. Assessing the likely competitive effects of a proposed transaction is a fact-specific exercise that takes into account the current market dynamics, which may be different in the future.”

“However, the evidence did not support a conclusion that Essilor’s proposed acquisition of Luxottica may be substantially to lessen competition in violation of Section 7 of the Clayton Act,” it added. 

Essilor told OT that it is cooperating with the authorities where anti-trust clearance is required. 

China is the only remaining jurisdiction where conditions must be met before the deal can be closed. Brazil’s approval is expected to become effective in the coming days if no appeal is made.  

Once approval has been received, Essilor will be renamed EssilorLuxottica and become a holding company of the combined group.