Illumina Gets Favorable Decision Regarding Grail Acquisition

In a decision expected to limit Brussels’ merger authority, American gene sequencing firm Illumina prevailed in court against the European Union’s inquiry into its $7.1 billion purchase of cancer diagnostic test manufacturer Grail.

Illumina, which created Grail and spun it off in 2016, before re-acquiring it in 2021 for just over $7 billion, went up against the decision of the European Commission to utilize an authority called Article 22 of the European Union to evaluate the purchase, despite the fact that it was outside the EU’s merger revenue benchmark.

Companies concerned about EU scrutiny of small agreements and regulatory overreach have been keeping a careful eye on this case. However, authorities are concerned that it may be a “killer acquisition,” which is a type of purchase in which large corporations buy startups with the intention of shutting them down. This is particularly true in the technology and pharma sectors.

However, this win may have limited significance for Illumina, which split off Grail once again in June to adhere to an order from the European Union while maintaining a minority ownership of 14.5%.

Illumina had disputed the EU merger inquiry that petitions from numerous EU nations had initiated, and the General Court of the European Union had decided in favor of the Commission in 2022.

But the Court of Justice of the European Union (CJEU), which is the top court in the EU, ruled in favor of Illumina.

“The Court of Justice sets aside the judgment of the General Court and annuls the decisions by which the Commission accepted requests from national competition authorities seeking the examination of the proposed concentration,” CJEU judges stated.

They added that the Commission is not authorized to request or accept submissions of proposed deals if there’s no European component from national competition regulators if these agencies are not empowered by their own laws—or are not competent enough—to review such concentrations.

According to the Court, it is essential for EU authorities to adhere to the revenue level when evaluating a merger. This is because the threshold serves as a crucial source of predictability and legal certainty for enterprises.

In 2022, the Commission, which is the EU’s competition regulator, obstructed the deal and forced Illumina to part with Grail. It also levied a punishment of 432 million euros, equivalent to $478 million, against Illumina for concluding the deal in 2021 before obtaining its approval.

Based on the verdict of the CJEU, Illumina stated that it was not liable to pay the fine. The challenge that it brought against the veto of the accord by the EU is thus rendered irrelevant, the firm added.

The post Illumina Gets Favorable Decision Regarding Grail Acquisition appeared first on LifeSci Voice.