Illumina Inc (NASDAQ:ILMN), a genetic testing company, has been ordered by EU antitrust regulators to sell Grail after closing its takeover of the cancer test maker before securing their approval.
In a statement, the European Commission said it has adopted, under the EU Merger Regulation, “restorative measures requiring Illumina to unwind its completed acquisition of Grail”.
The European Commission blocked the $7.1 billion Grail acquisition in September 2022 over concerns it would stifle innovation and consumer choice in the cancer detection tests market.
In July 2023, the Commission fined Illumina €432 million (US$460 million), equal to 10% of the company’s global revenue and the maximum allowed under EU merger rules for such infringements.
As well as restoring Grail’s independence from Illumina to the same level it enjoyed prior to the acquisition, the Commission said Grail has to be as viable and competitive as it was before and the divestment must be “executable within strict deadline and with sufficient certainty”.
It gave Illumina the choice of divestment methods, such as a trade sale or a capital markets approval, but said it must approve the divestment plan.
“Today’s decision restores competition in the development of early cancer detection tests,” commented Didier Reynders, the commissioner in charge of competition policy.
“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.”
Contact the author at stephen.gunnion@proactiveinvestors.com