FTC blocks acquisition of Daemyung Optical

The Fair Trade Commission said yesterday it disapproved of Essilor Amera Investment’s acquisition of a Korean lens company worth about 10 billion won ($9.3 million), saying the takeover might limit fair competition in the local market.

Based in France, Essilor is the world’s No. 1 corrective lens maker, accounting for about 47 percent of the global lens market.

The company has been preparing to acquire Daemyung Optical, signing a contract to buy a 50 percent stake in the company in March. Essilor notified the FTC at the time.

Since then, the antitrust agency embarked on an investigation into how the acquisition might affect the local market.

Daemyung is the second-biggest lens company in the local market, which is?worth?about 700 billion won.

It was the French company’s second attempt to buy a Korean company. It bought the country’s largest lens manufacturer, Chemiglas, in 2002.

If Essilor acquires Daemyung, it would have 66.3 percent of the corrective lens market and 46.2 percent of the multifocal lens market.

“The FTC made the decision because it is highly likely that the French company could raise prices of those lenses and abuse its market power in forcing clients to buy its products,” an official at the FTC said.

The official said Daemyung has been competing against foreign lens providers like Essilor for the past 10 years by keeping its prices lower.

If the two merge, the FTC also said customers could be compelled to purchase their products because they will have a wide range of low-priced options to expensive product lines.

“The two are almost dominating distribution channels,” the FTC official said.

It is the first disapproval by the FTC since 2009, when the agency didn’t allow Lotte Hotel to buy the duty-free mall Paradise Global.

BY SONG SU-HYUN [ssh@joongang.co.kr]