EU clears EssilorLuxottica’s €7.2bn GrandVision buy

The European Commission has cleared, with conditions, EssilorLuxottica’s €7.2 billion acquisition of Dutch eyewear retailer GrandVision after the Ray-Ban maker agreed to sell more than 300 GrandOptical stores in three countries to address competition concerns.

The clearance removes one obstacle to the transaction as deal talks continue.

The European Commission said French-Italian EssilorLuxottica, the world’s largest supplier of eyewear, agreed to sell a total of 351 GrandOptical stores in Italy, the Netherlands and Belgium to address competition concerns.

Bloomberg reported that despite the EU approval, the pandemic’s effect on retail and a legal row with GrandVision have led EssilorLuxottica to consider its options, including renegotiating the price or even walking away from the transaction.

Under the deal terms, EssilorLuxottica could be liable for a €400 million termination fee, Bloomberg reported.

European Commission executive vice-president Margrethe Vestager, in charge of competition policy, said: “EssilorLuxottica offers leading brands of eyewear products, such as Ray-Ban, whilst GrandVision is a major optical retailer in Europe.

“Our in-depth investigation showed that, by acquiring a greater retail footprint, EssilorLuxottica could have degraded the access of rival opticians to EssilorLuxottica’s branded eyewear products in Belgium, Italy and the Netherlands.

“This would mean less choice and higher-priced eyewear for consumers in those countries.

“The remedies proposed by EssilorLuxottica will address this risk by ensuring that competition at the optical retail level remains vibrant at national level and to the benefit of customers in these countries.”

EssilorLuxottica said: “The outcome of the proposed transaction is still depending on the sign off from the competition authorities in Chile and Turkey, as well as the decisions regarding on-going litigations.”

GrandVision said: “GrandVision N.V. today confirms that the European Commission cleared the sale by HAL Optical Investments B.V. of its 76.72% ownership interest in GrandVision to EssilorLuxottica.”

GrandVision CEO Stephan Borchert said: “This is a significant milestone in the approval process for the transaction, and we are pleased that the regulatory authorities recognize the benefits the transaction will bring to our stakeholders.

“The transaction is aimed at providing consumers with tailored vision care products to meet all of their vision and style needs.

“Both companies have a history of doing business in a way that benefits all stakeholders and will continue to do so following the closing of the transaction …

“The transaction has been cleared so far in the European Union, the United States, Russia, Mexico, Colombia and Brazil, and it is currently under review in Chile and Turkey.

“GrandVision continues to support EssilorLuxottica with the shared objective to close the transaction before 31 July 2021.

“After the transaction has been closed, EssilorLuxottica will launch a mandatory cash public offer for all outstanding shares in the company, in accordance with the applicable Dutch public offer rules.”