Essilor/Luxottica Merger Clears U.S. and EU Reviews

The proposed merger between Essilor and Luxottica cleared two major hurdles today as trade regulators and review commissions in the United States and in the European Union cleared the upcoming deal without conditions. Both regions are jurisdictions where antitrust approvals are a condition precedent to the closing of the transaction. The deal must still be cleared by regulatory commissions in China, among other countries.

According to a statement today from the U.S. Federal Trade Commission (FTC), the evidence presented during a review of the merger did not support a conclusion that Essilor’s proposed acquisition of Luxottica violates federal antitrust laws. Its year-long review of the proposed merger included more than 1 million documents supplied by Essilor and Luxottica, and interviews with more than 100 market participants (including lens casters, frame manufacturers, optical retailers, and independent eyecare practitioners).

From its statement: “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 swath 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. Here, 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.”

View the entire statement from the U.S. FTC here.

Earlier today, the EU announced that it had also cleared the proposed deal of any potential anti-trust issues. The EU had previously been a hiccup of sorts in the approval process when it opened a full-scale investigation in September—called a Phase II investigation—saying the deal involving the two companies may reduce competition in ophthalmic lenses and eyewear, and further study was needed. You can read EB's reporting on it here.
EU Competition Commissioner Margrethe Vestager said in a statement today the group has found no reason to believe the merger would harm competition in the EU. "We've received feedback from nearly 4,000 opticians in a market test in Europe that Essilor and Luxottica would not gain market power to harm competition," she said.
In addition to the U.S. and the EU, the 48 billion euro merger has also been unconditionally approved in 13 other countries: Australia, Canada, Chile, Colombia, India, Japan, Mexico, Morocco, New Zealand, Russia, South Africa, South Korea, and Taiwan.

The merger must still be approved by the authorities in China and Brazil, according to statements released by Luxottica and Essilor.
According to a joint statement released by Essilor and Luxottica, the finalization of the proposed combination is planned for the first part of 2018, after obtaining all necessary authorizations.