The European Commission on
Thursday gave the green light to a merger between French lens
maker Essilor and Italian eyewear giant Luxottica, saying it
would not have a negative impact on competition.
The merger will go ahead in the first half of 2018, Luxottica
said as its stock rose over 4% on news of the merger approval.
The EC had been evaluating the merger since September over
fears it might reduce competition on the lens market.
"It is necessary to carefully assess whether the operation
will bring higher prices," said Competition Commissioner
Margrethe Vestager.
In a statement, Leonardo Del Vecchio's group said "we will
show the EC the benefits of the merger to consumers".
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.
The merged group will be reportedly listed in Paris.
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