April 17, 2024

European Commission approves Illumina’s plan to divest GRAIL

On April 12, 2024, the European Commission announced that it approved Illumina’s plan to divest GRAIL in accordance with the EU Merger Regulation (“EUMR”).  On October 12, 2023, Illumina, Inc., a U.S.-based DNA sequencing developer, was ordered by the Commission to unwind its acquisition of GRAIL, Inc., a U.S.-based developer of cancer screening tests, after the companies finalized their merger before the Commission could complete its investigation into possible anti-competitive effects.  At that time, the Commission required Illumina and GRAIL to comply with certain transitional measures during the dissolution period.  The Commission also required the companies to meet certain restorative measures to ensure that the divestment occurred within a timely manner; restored GRAIL to the same level of independence enjoyed prior to the acquisition; and enabled GRAIL to operate as a viable and competitive business after the divestment.

According to the Commission, it decided to approve Illumina’s divestment plan after noting that the plan “foresees that Illumina can select the appropriate divestment method (either via a trade sale or capital markets transaction)” and meets all conditions of the restorative measures that the Commission imposed.  The Commission also indicated that, until the dissolution is complete, the companies must continue to comply with the transitional measures that were imposed.

In September 2022, the Commission prohibited Illumina’s acquisition of GRAIL over concerns that the merger would stifle innovation and have a negative impact on the emerging market for blood-based early cancer detection tests.  In July 2023, the Commission fined Illumina approximately €432 million for moving forward with the merger in violation of the EUMR’s “standstill obligation,” which requires companies with an EU dimension to refrain from implementing mergers until the Commission approves the transaction.  Illumina officially announced its plan to divest GRAIL in December 2023, just days after the U.S. Court of Appeals for the Fifth Circuit affirmed the Federal Trade Commission’s determination that the merger threatened competition in the U.S. market for cancer detection tests.

European Commission Press Release