SINGAPORE - The Competition Commission of Singapore (CCS) has initiated the second phase of a review on the proposed multibillion-dollar merger between French lens maker Essilor International and Italian eyewear manufacturer Luxottica Group.
On Sept 13, CCS received a notification for decision on whether the proposed merger would infringe the Competition Act. The phase 1 review was completed on Nov 13, but the CCS was unable to conclude that the proposed transaction would not raise competition concerns.
In particular, it found that the two companies are the biggest players in their respective markets, which means that a merger could give them substantial market power in the complementary segments of ophthalmic lenses, prescription frames and sunglasses.
Essilor designs, manufactures and wholesales ophthalmic lenses, in addition to manufacturing and marketing machines, instruments and services for eye-care professionals. It also sells sunglasses, with its activities for online retail taking place mostly outside of South-east Asia. In Singapore, it says its activities in these areas are "almost negligible", the CCS highlighted.
Meanwhile, in Singapore Luxottica - whose brands include Ray-Ban, Oakley, Burberry and Coach - is involved in the wholesale supply activities of spectacle frames and sunglasses under its brands or under brands licensed by third parties. At the retail level, it sells sunglasses through Sunglass Hut.
The CCS said in a press release: "Retailers may face reduced choices should the merged entity decide not to sell individual products separately, or to sell them separately, but at prices higher than the prices of the bundled products. The transaction may therefore substantially lessen competition in the supply of these products in Singapore, which necessitates a more detailed phase 2 review," said the CCS, adding that it will issue a decision on the proposed transaction by the end of the phase 2 review.
The commission is inviting feedback and views in relation to the proposed transaction, with the closing date for submissions on Jan 2, 2018.
The second phase review can take up to 120 working days to complete, during which the two companies can also address any potential competition concerns.
According to a Reuters report last month, European Union's antitrust regulators had halted the investigation into the 46 billion euro (S$73.2 billion) proposed merger after the two companies failed to submit requested data. However, the Canadian Competition Bureau as well as 10 other jurisdictions, including Australia, New Zealand, Japan and South Korea have all cleared the transaction, Reuters reported.