"BRUSSELS -- Illumina must unwind its $7.1 billion acquisition of cancer-test developer Grail, the European Union's competition watchdog said.
The European Commission, which oversees antitrust regulation for the bloc, said Thursday that Illumina would have to submit a concrete plan for divesting itself of Grail. The bloc prohibited the deal last year over concerns that it would stifle innovation and hurt consumer choice in the emerging market for early cancer-detection blood tests.
Illumina, which makes gene-sequencing products, completed the transaction in 2021 despite antitrust concerns.
The commission said Thursday that Illumina must return Grail to the same level of independence the company had before the acquisition and that Grail would have to be as competitive after the divestment as it was before the deal closed.
If Illumina fails to comply with the divestment order, the commission has the power to fine the company as much as 10% of its annual worldwide revenue.
Illumina said Thursday that it is currently reviewing the commission's divestment order.
Grail said the commission's decision recognizes its role in cancer detection and the company has been held separate from Illumina while antitrust authorities have weighed its acquisition. During that time, Grail made progress on its multicancer detection test, the company said.
The European decision to block the deal came with a heavy cost for Illumina. The company's former chief executive, Francis deSouza, resigned earlier this year following a bruising proxy battle with billionaire activist investor Carl Icahn, who had criticized the transaction.
U.S. antitrust enforcers also opposed the deal. The Federal Trade Commission in April reversed the ruling of an administrative-law judge and ordered Illumina to unwind the merger. Illumina has appealed.
San Diego-based Illumina makes gene-sequencing machines and the chemicals those machines use. It founded Grail, which sells a blood test designed for the early detection of cancer, and spun off a majority of the business in 2017, retaining a minority stake.
Illumina reached a deal in 2020 to buy the part of Grail that it didn't already own and later completed the acquisition despite objections from the FTC and a continuing investigation by the European regulator.
The commission later fined Illumina 432 million euros, equivalent to about $459 million, for proceeding with the acquisition before the watchdog had decided whether to approve the deal." [1]
1. EU Orders Illumina To Unwind Acquisition Of Grail. Kim Mackrael; Loftus, Peter. Wall Street Journal, Eastern edition; New York, N.Y.. 13 Oct 2023: B.1.
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