Essilor's Bid to Acquire South Korean Lens Maker Is Rejected by Country’s FTC

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SEJONG CITY, South Korea―South Korea’s Fair Trade Commission (FTC) has rejected a bid by Essilor Amera Investment, a unit of Essilor International to acquire Daemyung Optical, a local glass lens manufacturer, on the grounds that the move could hinder market competition, according to the Korea Times. “We determined that if Essilor acquires Daemyung, it is likely to raise lens prices and abuse its dominance of the market,” the commission said.

Responding to the commission’s decision, an Essilor spokesperson told VMail, “Korea is a very specific case as our market share in this country is high. Daemyung Optical approached us to partner with them. We gave this a try knowing from the start that the chances to succeed would be limited because of the local context. It would be fair to say we disagree with the analysis and the market shares used by the KFTC.”

Essilor signed an agreement to acquire a 50 percent stake in Daemyung in January, 2013, and reported the merger to the commission after two months. In 2002, it acquired Chemi Glass, a local competitor of Daemyung. Essilor already has Essilor Korea, Chemi Glass and Deco Vision as subsidiaries. If the acquisition had been allowed, Essilor would have become the most dominant force in the short focus lens market, with a combined market share of 66.3 percent. That means its market share will be six times bigger than that of the second biggest competitor, Hanmi Swiss Optical. It will also be the top player of the progressive lens market with a 46.2-percent share, according to the commission.

“Daemyung has been leading the price competition during the past 10 years in the short focus lens market, stabilizing prices…we expect this measure will prevent the local company from becoming a mere supplier of the global company and help maintain the competition structure,” the commission explained in a media briefing. The commission said its presence has pressured high-priced foreign brands like Hoya of Japan, Carl Zeiss, and Essilor to lower prices. A survey of opticians also showed that the acquisition is likely to raise lens prices.

South Korea’s spectacle lens market is estimated at around 600 billion to 700 billion won, with half of Korean adults wearing glasses or contact lenses, the Korea Times reported.