Anticipated acquisition by Essilor International (Compagnie Generale d'Optique) SA of Wholesale Lens Corporation Limited

Affected market: Ophthalmic lenses

No. ME/4154/09

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisidction, third party views, assessment and decision.

The OFT's decision on reference under section 33(1) given on 27 July 2009. Full text of decision published 30 July 2009

Please note that the square brackets indicate figures or text which have been deleted or replaced in ranges at the request of the parties or third parties for reasons of commercial confidentiality.

PARTIES

Essilor International (Compagnie Générale d'Optique) SA (Essilor) is a French company listed on the Euronext Paris stock exchange. It is the parent and holding company for the Essilor Group of companies whose main activities are the manufacture and supply of finished glass and plastic ophthalmic lenses to opticians worldwide. Essilor also supplies ophthalmic substrate to independent laboratories and optician chains.

In the UK Essilor supplies a range of ophthalmic lenses (both branded and unbranded) and substrate. In addition, Essilor has a 50/50 joint venture with the Nikon Corporation (Nikon Essilor Company Limited) which supplies Nikon branded ophthalmic lenses in the UK.

Wholesale Lens Corporation Limited (WLC) is a UK wholesaler of ophthalmic lenses. WLC does not manufacture lenses but rather buys them from manufacturers in Asia (mostly India) and imports them into the UK.

TRANSACTION

Essilor signed a share purchase agreement with WLC on 11 May 2009 for it to acquire [ ] per cent of WLC's shares which will give it full control over WLC.

The parties informally submitted the proposed transaction for examination by the Office of Fair Trading (OFT) on 12 June. The OFT's administrative deadline by which to announce a decision in this case is 7 August.

JURISDICTION

As a result of the proposed transaction Essilor and WLC will cease to be distinct.

The parties overlap in the supply of finished ophthalmic lenses in the UK (where together they account for around [30-40] per cent) and the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT therefore believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation.

THIRD PARTY VIEWS

Customers were not concerned about the proposed merger.

Some competitors were not concerned about the proposed merger while others were. Their concerns focused on Essilor's continuing increase in its market share. However, the OFT has examined this acquisition based on Essilor's market position at the time of this decision.

ASSESSMENT

The parties overlap in the supply of plastic ophthalmic substrate and ophthalmic lenses.

The accretion to Essilor's share of plastic ophthalmic substrate's as a result of the proposed merger is very small and competition concerns do not arise.

Ophthalmic lenses can be examined in the whole or segmented according to the material from which they are made and by corrective design. However, on any measure the OFT has not found any competition concerns. The increments on all possible measures are low and, on the evidence available to it, the OFT has found that WLC has not been an especially close competitor to Essilor.

Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

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