Chile: FNE greenlights Essilor-Luxottica merger

Chile’s National Economic Prosecutor’s Office (FNE) approved, in Phase 2 of its investigation, the merger agreement between Essilor International  and Luxottica Group. Both companies participate in different levels of the international eyewear and optics industry.

The FNE determined that OPV, Luxottica’s retail brand, does not currently have the volume of purchases necessary to harm its upstream competitors, so the merged company could not successfully carry out an effective blockade to smaller suppliers of prescription frames and sunglasses. Likewise, the operation would not generate significant additional incentives for Luxottica to block access to these inputs for downstream rivals.

Thus, the FNE concluded that the merged company would not be able to exten transfer its eventual market power in the area of ophthalmic lenses to the wholesale market for prescription frames and sunglasses, due to the low costs involved in switching for retail outlets and the existence of alternative, independent suppliers.

However, the FNE has warned Luxottica that they must exercise special care regarding the conditions it offers to retail vendors in order to avoid possible abuses in the optical industry.

Full Content: Fiscalía Nacional de Economía

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