Mergers: Commission opens in-depth investigation into proposed acquisition of GrandVision by EssilorLuxottica

sunglasses

(Apostolos Vamvouras, Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has opened an in-depth investigation to assess the proposed acquisition of GrandVision by EssilorLuxottica, under the EU Merger Regulation. The Commission is concerned that the merger may reduce competition for the wholesale supply of ophthalmic lenses and eyewear, as well as for the retail supply of optical products.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “EssilorLuxottica is the world’s largest supplier of eyewear and GrandVision is Europe’s largest optical retail chain. 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.”

The proposed merger would combine two leaders in the optical industry. EssilorLuxottica is the largest supplier of ophthalmic lenses and eyewear in Europe and worldwide, and has well-known brands in its portfolio, such as Ray-Ban and Oakley. Additionally, EssilorLuxottica is active in retail distribution, notably in the UK and Italy. GrandVision is a globally active eyewear retailer, which 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.

 

The Commission’s preliminary competition concerns

The Commission’s initial market investigation raised several issues relating in particular to the combination of EssilorLuxottica’s strong market position in the wholesale supply of optical products, notably lenses and eyewear, and GrandVision’s leading presence in the retail distribution of these products.

At this stage, the Commission is concerned that the transaction could lead to a reduction of competition in the retail markets for optical products. In particular, in its in-depth investigation, the Commission will assess:

(i)      whether EssilorLuxottica will use its strong market presence in lenses and eyewear to raise prices or degrade conditions of supply to competing retailers of GrandVision,

(ii)     the impact of the combination of the activities of EssilorLuxottica and GrandVision in retail, particularly in those countries and areas where they currently compete, and

(iii)    whether the merged entity could limit access of competing suppliers of lenses or eyewear to GrandVision stores, which constitute the largest optical products distribution network in Europe and a key outlet for competing suppliers.

The Commission will investigate whether such changes in the competitive landscape of the optical industry could lead to adverse effects on competition, such as increased prices or reduction of choice of optical products for final consumers.

The transaction was notified to the Commission on 23 December 2019. EssilorLuxotica and GrandVision have decided not to submit commitments during the initial investigation to address the Commission’s preliminary concerns. The Commission now has 90 working days, until 22 June 2020, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

 

Companies and products

EssilorLuxottica is a French-Italian vertically integrated multinational corporation based in Paris and the world’s largest supplier of eyewear with over 9,100 retail stores globally. It was founded on 1 October 2018 after the combination of the Italian Luxottica Group with the French Essilor International. The Commission approved unconditionally this transaction on 1 March 2018.

GrandVision is a Dutch-based global player active in optical retail with a focus on delivering eye care to customers globally. GrandVision operates over 7,000 stores in more than 40 different countries across Europe, North and Latin America and Asia.

 

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

In addition to the current transaction, there are five ongoing Phase II merger investigations: the proposed acquisition of DSME by HHIH, the proposed acquisition of Metallo by Aurubis, the proposed acquisition of Chantiers de l’Atlantique by Fincantieri, the proposed creation of two joint ventures by Boeing and Embraer, and the proposed acquisition of Lotos by PKN Orlen.

More information will be available on the competition website, in the Commission’s public case register under the case number M.9569.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Technology is a force for peace and prosperity. Don’t let its challenges obscure this

Women outliving men ‘everywhere’, new UN health agency statistics report shows

WHO working to save lives following powerful earthquake in Albania

Banking Union: Non-performing loans in the EU continue to decline

Backed by UN agency, countries set to take on deadly livestock-killing disease

Spotlight Initiative – EU and UN fight against domestic violence in the Pacific region

Trade negotiations with US can start under certain conditions

Unprecedented humanitarian crisis in Mali revealed in new report

How do we build a #sustainableworld?

COVID-19: ‘Top priority’ must be on containment, insists WHO’s Tedros

A Brussels antithesis reveals where the EU is heading

7 steps to becoming a ‘CEO Academy’

Greece may offer to China a European gateway

The Dead Sea is drying up, and these two countries have a plan to save it

European Youth cries out: Sustainable Development Goals ambitious, but lack focus on youth

The challenge of maintaining interest in Primary Health Care in medical students

Eurozone stuck in a high risk deflation area; Draghi expects further price plunge

Africa is set to get its first vertical forest

The UN went to one of the world’s richest countries to look at poverty – this is what it found

OECD sees global growth slowing, as Europe weakens and risks persist

How to push out of our comfort zones – an extract

Burundi: Inclusive dialogue ‘only viable option’ for resolving country’s political crisis says, UN envoy

World’s Press Calls on the United Kingdom to Address Press Freedom Concerns

Scotland in United Kingdom: It’s either the end or the beginning of the end

Can Southeast Asia keep up with growing energy demand?

Global Citizen-Volunteer Internships

Sweden is a top performer on well-being. Here’s why

JADE at European Business Summit 2015

It’s time to ‘eliminate the scourge of conflict-related sexual violence’, urges UN chief

Azerbaijan chooses Greek corridor for its natural gas flow to EU

The Chinese film boom luring Hollywood’s stars

WHO reports ‘very strong progress’ in battling DR Congo Ebola outbreak

Repression, use of force risk worsening Bolivia crisis: UN human rights chief

State aid: Commission approves €50 million Italian support scheme for production and supply of medical equipment and masks during Coronavirus outbreak

ECB: Growth measures even before the German elections

YO!FEST ENGAGES 8,000 YOUNG EUROPEANS IN FUTURE OF EU

End of plastic water bottles at European Parliament

How and why Mercedes fakes the EU fuel consumption tests

These dogs can smell tree disease – and could help save the world’s orange groves

Give a chance to the brothers of Ailan: reception of refugees in Greece

Amid troop build-up in Rohingya’s home state, UN appeals to Myanmar for peaceful solution

Draghi tells the Parliament the ECB to use all its weaponry; euro slides to parity with the dollar

‘Tenacious’ Kyrgyz lawyer and statelessness champion, wins prestigious UNHCR prize

Raw materials use to double by 2060 with severe environmental consequences

Energy Union: Commission calls on Member States to step up ambition in plans to implement Paris agreement

What matters most to young Europeans?

UN and African Union in ‘common battle’ for development and climate change financing

This Indian school accepts plastic waste instead of fees

Is this 3D-printed building the future home for astronauts on Mars?

Immigration crisis at its very worst: EU to outsource rescue business to North Africa?

Can the world take the risk of a new financial armageddon so that IMF doesn’t lose face towards Tsipras?

4 bold new ways New York is going clean and green

UN’s Bachelet addresses progress and setbacks in human rights worldwide

What business leaders can learn from jazz

COP25: Support business efforts to tackle climate change, urges Guterres

Illicit trade endangers the environment, the law and the SDGs. We need a global response

The challenges of mental health: an inconvenient reality

What is carbon offsetting?

The world has made spectacular progress in every measure of well-being. So why does almost no one know about it?

Can indoor farming feed the world?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s