EssilorLuxottica SA’s bid for eyewear retailer GrandVision NV is on track for European Union regulatory approval as soon as this month, clearing one hurdle for the deal even as talks on the future combination continue.
The companies are in the final stages of an EU merger review that will pave the way for approval before an April 12 deadline, according to people familiar with the matter, who asked not to be named because the process isn’t public.
The duo have received positive feedback for concessions to sell off stores across Europe to eliminate overlaps between their businesses, one of the people said. GrandVision shares advanced as much as 2.8% in Amsterdam trading while EssilorLuxottica was up 2.9 percent as of 5:24 p.m. in Paris.
The EU’s blessing for the 7.3 billion-euro ($8.7 billion) deal would come after a rocky year for EssilorLuxottica, the world’s largest supplier of eyewear. But even with EU nod, the deal may not be in the bag yet.
While EssilorLuxottica still sees the rationale of the deal, the changing business environment and a subsequent legal tussle with GrandVision have led it to consider its options, including renegotiating the price or even walking away from the transaction, people familiar with the situation said in December. Under the deal terms, EssilorLuxottica could be liable for a 400 million-euro termination fee.
EssilorLuxottica, GrandVision and the European Commission all declined to comment on the EU approval.
GrandVision previously said it supported EssilorLuxottica’s aim to win regulatory approval for the deal by July.
The EU flagged concerns in February last year to check whether EssilorLuxottica would try to increase prices or degrade its supply to retailers that would compete with its own stores and those of GrandVision.
Officials have also been looking at how merging the two companies’ retail stores will affect competition and whether the combined firm might reduce the range of lenses on sale in GrandVision locations.
EssilorLuxottica sought to solidify its global market position by adding GrandVision’s network of European eyewear chains. The planned acquisition would add more than 7,000 stores, selling lower-priced eyewear through chains such as Brilleland and For Eyes in more than 40 countries.
The deal has already been unconditionally approved in the US, Russia and Colombia.
By Albertina Torsoli, Aoife White and Tommaso Ebhardt.