BRUSSELS—The European Commission announced today that it has approved the proposed $58.5 billion (€48 billion) merger between Essilor (Euronext Paris: EI) and Luxottica (MTA: LUX). The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it. "Our job is to ensure that a merger won't lead to higher prices or reduced choices, in this case for opticians and consumers in the EU. We've received feedback from nearly 4,000 opticians in a market test in Europe that Essilor and Luxottica would not gain market power to harm competition. As the result of the market test did not support our initial concerns we can let this merger go ahead unconditionally,” said commissioner Margrethe Vestager, who is in charge of competition policy.

Today's decision follows an in-depth investigation to assess whether the merged company might use Luxottica's powerful brands to make opticians buy Essilor lenses and exclude other lens suppliers from the markets, through practices such as bundling or tying. During its investigation, the Commission received feedback from nearly 4,000 opticians throughout Europe. The investigation found that Luxottica's strongest brands in frames and sunglasses, including Ray-Ban, are generally not essential products for opticians. This conclusion is consistent with Luxottica's market share of less than 20 percent in frames in Europe and with the fact that a sizable number of optical stores in Europe do not sell any Luxottica products, the Commission said in a statement.

The merged company would not be able to exploit any market power in sunglasses to shut out competing suppliers of lenses from the market.

The Commission concluded that the merged company would have limited incentives to engage in practices such as bundling and tying because of the risk of losing customers. Even if it followed such practices, this would be unlikely to marginalize competing suppliers of lenses and harm effective competition.

The merged company would not be able to exclude rival eyewear suppliers from the market, since Essilor has insufficient market power and incentives to shut out Luxottica's competitors.

There were no competition concerns due to the elimination of emerging competition, since Luxottica's limited activities in lenses and Essilor's limited activities in eyewear were unlikely to play an important role for competition in the foreseeable future, the Commission said. Therefore, the Commission concluded that the transaction would raise no competition concerns in the EEA or any substantial part of it.

Given the worldwide scope of the companies' activities, the Commission cooperated closely with other competition agencies, including in particular the U.S. Federal Trade Commission, as well as the competition authorities of Australia, Brazil, Canada, Chile, China, Israel, New Zealand, Singapore, South Africa and Turkey.

To date, the proposed merger has also been unconditionally approved in 13 other countries: Australia, Canada, Chile, Colombia, India, Japan, Mexico, Morocco, New Zealand, Russia, South Africa, South Korea and Taiwan.

Essilor and Luxottica issued a joint statement today saying the finalization of the proposed merger is planned for the first part of 2018, after all necessary authorizations are obtained.