By Matthew Perlman

Law360 (March 23, 2021, 5:51 PM EDT ) After a lengthy review, Europe's competition enforcer on Tuesday approved EssilorLuxottica SA's €5.46 billion ($6.6 billion) purchase of a majority stake in optical retailer GrandVision NV with the divestiture of some 350 stores across Belgium, Italy and the Netherlands.

The European Commission said in a statement that it accepted the companies' offer to sell the stores to cure concerns raised by the combination of EssilorLuxottica's wholesale position in the supply of optical products and GrandVision's retail footprint in the countries.

Margrethe Vestager, head of competition policy for the commission, said the investigation showed EssilorLuxottica could have reduced access for rival opticians to its products if the deal had gone ahead as initially proposed.

"This would mean less choice and higher-priced eyewear for consumers in those countries, Vestager said in Tuesday's statement. "The remedies proposed by EssilorLuxottica will address this risk by ensuring that competition at the optical retail level remains vibrant at national level and to the benefit of customers in these countries."

In Belgium, the companies will unload the GrandOptical chain and its 35 stores, but without the brand name, according to the commission. In Italy, EssilorLuxottica will transfer its VistaSi chain and 72 stores to a new owner, along with 72 stores under the "GrandVision by" name, which will be rebranded. In the Netherlands, the commission said, 142 EyeWish stores and the chain itself will be sold.

"The remedy package also contains additional safeguards to ensure the smooth transfer of the divestment business to the purchaser, including transitional supply and support arrangements," the commission said in the statement.

GrandVision confirmed the commission's decision in its own statement Tuesday, saying that the deal is aimed at meeting the needs of consumers and that both companies have a history of "doing business in a way that benefits all stakeholders."

"This is a significant milestone in the approval process for the transaction, and we are pleased that the regulatory authorities recognize the benefits the transaction will bring to our stakeholders," GrandVision CEO Stephan Borchert said.

EssilorLuxottica also acknowledged the commission decision in a statement Tuesday, saying that the "long in-depth review" by enforcers had been impacted by the COVID-19 pandemic and that the move still needs approval from competition authorities in Chile and Turkey. The statement also said the transaction's ultimate outcome could still depend on decisions in ongoing litigation.

Enforcers stopped the clock on their in-depth merger review in July, citing the need for documents from the parties, shortly after EssilorLuxottica said it had initiated legal proceedings in the Netherlands over the Dutch retailer's handling of the COVID-19 pandemic.

Paris-based EssilorLuxottica said at the time that GrandVision was refusing to provide information about how it has managed its business during the COVID-19 pandemic and the extent to which it had allegedly breached the merger agreement. GrandVision denied EssilorLuxottica's claims and said the company is not entitled to information about pandemic mitigation efforts.

GrandVision also initiated confidential arbitration proceedings seeking to confirm that it has not breached the merger agreement. The lower court tossed EssilorLuxottica's claims in August and an appeal is ongoing, as is the arbitration, according to an annual report filed this month by GrandVision.

The company said in Tuesday's statement that it "continues to support EssilorLuxottica with the shared objective to close the transaction before 31 July 2021."

EssilorLuxottica agreed in July 2019 to purchase a 76.72% stake in GrandVision from HAL Holding NV, a move that would combine the maker of Ray-Ban and Oakley products, which already has 9,100 stores globally, with the operator of 7,000 optical stores in more than 40 different countries, according to the commission.

The commission opened an in-depth probe of the move in February 2020, noting that EssilorLuxottica is the world's largest supplier of eyewear and that GrandVision is the largest optical retail chain in the bloc.

Absent the fix, the commission said EssilorLuxottica could limit or prevent competing retailers from accessing its products by raising prices or reducing the options for optical products that it sells, the commission said Tuesday.

EssilorLuxottica itself was formed in 2018 through the $49 billion merger between Essilor International SA and Luxottica Group SA. That deal also came under antitrust scrutiny, but European and U.S. officials ultimately approved the merger without conditions after a lengthy review.

EssilorLuxottica is represented in the merger review process by attorneys from Latham & Watkins LLP, including Jacques-Philippe Gunther, Mathilde Saltiel, Rita Motta, Amine Mansour, Julien Morize, Constance Dobelmann, Michael Egge, Farrell Malone, Frederic Pradelles, Laia Marco and Maria Loudjeva; and by attorneys from BonelliErede, including Claudio Tesauro.

--Additional reporting by Christopher Cole. Editing by Orlando Lorenzo.

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