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US: Does the merger of Essilor and Luxottica matter?

 |  February 16, 2017

In a $49 billion deal, Italian frames manufacturer Luxottica and French lens manufacturer Essilor announced that they will join up, EssilorLuxottica, that will be co-run by both groups.

BBC’s Ian Pollock writes that this largely uncommented deal should be a matter of more interest than its received.

These are two of the biggest firms in the lucrative international business of making spectacles. France’s Essilor is the world’s number one manufacturer of lenses and contact lenses, while Italy’s Luxottica is the leading frame manufacturer.

It is not obvious that the merger is in the public interest, though the two firms certainly think it is.

“The parties’ activities are highly complementary and the deal would generate significant synergies and innovation and would be beneficial to customers,” says Essilor.

There is some concern that if the deal goes through later this year the new company, to be called EssilorLuxottica, will become a behemoth of the industry.
It will sell not only lenses and frames around the world but will also be stocking its own optician’s shops as well, such as Sunglass Hut, and LensCrafters in the US and Australia, both currently owned by Luxottica.