The European Commission
said Tuesday it had opened a probe into the merger between
Italian eyewear giant Luxottica and French lensmaker Essilor
over fears it may reduce competition on the lens market.
It said it would shortly extend the probe to the frame-making
market.
"It is necessary to carefully assess whether the operation
will bring higher prices," said Competition Commissioner
Margrethe Vestager.
On January 16 Luxottica and Essilor announced the
50-billion-euro merger deal to create an eyewear giant with over
140,000 employees and sales in some 150 countries.
Luxottica, the world's leading spectacles maker, and Essilor,
the top manufacturer of ophthalmic lenses, would have jointly
reported net earnings of over 15 billion euros, based on 2015
annual results posted by the two companies, and a net combined
operating profit EBITDA of about 3.5 billion euros.
The companies said the merger, one of Europe's largest
cross-border deals, should bring medium-term annual revenue
benefits and cost cuts of between 400 and 600 million euros.
Following the operation, Italian holding company Delfin -
which is Luxottica's main shareholder and will also be the top
shareholder of the new entity - will hold a stake of 31% to 38%
in the new company.
Delfin is owned by Luxottica's founder and executive chairman
Leonardo Del Vecchio.
Shares in the companies surged after the merger announcement.
After the announcement of the EC probe, Luxottica shares fell
1% in Milan.
The merged group will be reportedly listed in Paris.
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