EU probes Luxottica-Essilor merger (5)

Weighing if costs to consumers will rise

(ANSA) - Brussels, September 26 - 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.
    Luxottica shares closed 1.5% on the news of the investigation.
    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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