Singapore's competition watchdog has started the second phase of a review on the proposed €46 billion (S$73.2 billion) merger between French lens maker Essilor International and Italian eyewear manufacturer Luxottica Group.

The first phase was completed on Nov 13 but it was still not clear that the proposed transaction would not raise concerns.

In particular, the Competition Commission of Singapore (CCS) found that the two firms are the biggest players in their respective markets, so a merger could give them substantial power in the segments of ophthalmic lenses, prescription frames and sunglasses.

Essilor produces lenses as well as machines and instruments for eye-care professionals. It also sells sunglasses, although mostly outside of South-east Asia. It says its activities in these areas here are "almost negligible", the CCS noted.

Luxottica - whose brands include Ray-Ban, Oakley, Burberry and Coach - supplies spectacle frames and sunglasses under its brands or under brands licensed by third parties here. At the retail level, it sells sunglasses through Sunglass Hut.

"Retailers may face reduced choices should the merged entity decide not to sell individual products separately, or to sell them separately but at prices higher than the prices of the bundled products," the CCS said.

"The transaction may, therefore, substantially lessen competition... in Singapore, which necessitates a more detailed phase 2 review," it noted. Feedback on the proposed merger can be made until Jan 2.

Reuters said last month that European regulators halted a review of the deal after the two firms failed to submit requested data.

However, Canada as well as 10 other jurisdictions, including Australia, New Zealand, Japan and South Korea, have all cleared the transaction, Reuters reported.