High expectations from Essilor and Luxottica merger deal

Company - Mohit Shah - Feb 20,2017

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high expectations from essilor and luxottica merger deal

Looming merger news between Essilor and Luxottica builds up higher prospects towards innovation as well as customer benefits.

Two of the biggest firms from the global spectacles market had announced a merger in early January. This is seen as a lucrative business merger deal which is aimed to benefit the public as seen by the two companies.

Essilor, based in France, is the world's top manufacturer of lenses and contact lenses, whereas Italy's Luxottica is a famous frame manufacturer which is renowned on an international level.

If the deal turns out to be successful later this year, the new company will surely become a beast for the industry. Apart from trading lenses and frames around the world, the firm would also be stocking its own optician's shops such as Sunglass Hut, and LensCrafters, primarily in the US and Australia which are currently possessed by Luxottica.  

Almost a year ago, during the disclosure of its 2015 financial results, Essilor bragged that it was "an undisputed leader” with the possession of 25% market share considering the collective world market including sunglasses lenses, prescription lenses and lenses used for making reading glasses.

On the other hand, Luxottica owns several of its own brand names including Oakley and Ray-Ban. The firm is also active in making licensed spectacle frames which carry elite fashion names such as Burberry, Armani, Bulgari, Prada, Chanel, Versace and Ralph Lauren.  

There is news that an inquiry would analyze if the merged firm evolves as a dominant body, thus reducing competition and raising prices for the customers.

Luxottica said, “Mergers are a continuing trend in optics, but this is a significant development” that will lead to huge supply chain and retail implications both for the industry and consumers.

The firm further added, the impact of the merger would be felt by the consumers straight away and it will watch over how the new organization manages itself.