Illumina Ordered To Unwind Acquisition Of GRAIL

October 16, 2023

By Bio-IT Staff 

October 16, 2023 | The European Commission (EC), under the EU Merger Regulation (EUMR), released a statement last week announcing it has taken restorative measures that require Illumina to unwind its acquisition of GRAIL. The acquisition was completed before the EC provided approval, breaching EU merger control rules.  

In response, Illumina released its own statement about the order: “Illumina maintains that the Commission does not have jurisdiction over this acquisition. The company's jurisdictional challenge remains pending at the European Court of Justice (ECJ).”  

However, Illumina also stated that it is committed to resolving all issues regarding GRAIL in a timely manner “with the objective of achieving the maximum value for shareholders and the best outcome for GRAIL.” According to Illumina, the terms of the order provide for flexibility in transaction structure, an encouraging outcome from Illumina's ongoing dialogue with the EC. 

What The Measures Entail 

The prohibition of the transaction was issued on September 6, 2022. The Commission cited concerns that the merger would inhibit innovation and decrease choices in the emerging market for blood-based early cancer detection tests. On July 2023, the EC also issued record fines on Illumina and GRAIL €432 million and €1,000, respectively, for carrying out the acquisition before approval. 

With the new restorative measures, Illumina and GRAIL are ordered to dissolve the transaction and restore the situation as it existed prior to the acquisition. They are also expected to comply with transitional measures until the dissolution of the transaction is completed.  

The EC stipulates that these divestment measures must be implemented with the following principles: the dissolution of the transaction must restore GRAIL’s independence to the same level as prior to Illumina’s acquisition; GRAIL must be as viable and competitive after divestment as prior to the acquisition; and the divestment must be executable within strict deadlines and with sufficient certainty so that the pre-transaction situation can be restored in a timely manner. 

Illumina is being given 12 months to complete its unwinding of the GRAIL acquisition, with a possibility of a three-month extension, and is allowed to make the appropriate divestment methods so long as it follows the outlined principles. Illumina is also required to submit a divestment plan that must be approved by the EC. 

“Today’s decision restores competition in the development of early cancer detection tests,” says Commissioner Didier Reynders. “These tests could represent a breakthrough in our fight against cancer. By ordering Illumina to restore GRAIL’s independence, we ensure a level playing field in this crucial market to the ultimate benefit of European consumers.” 

Illumina says its leaders will be responding to questions from the investment community during the company’s third quarter 2023 earnings call on November 9.