The European Commission (EC) has granted approval to Illumina's divestment plan for cancer test-maker Grail, aligning with the EU Merger Regulation.
This follows the Commission's directive from October 2023, mandating Illumina to reverse its acquisition of Grail to reinstate pre-transaction competition levels.
In September 2022, Illumina’s acquisition of Grail was blocked by the commission due to concerns over stifled innovation and reduced choice in the nascent market for blood-based early cancer detection tests.
However, Illumina and Grail 'unlawfully' completed the merger amidst the Commission's investigation, breaching EU merger control rules.
Consequently, in July 2023, both companies faced fines for this violation.
The October 2023 restorative measures necessitated Illumina to propose a divestment strategy to the Commission for approval.
The Commission's latest approval of Illumina's divestment plan allows for either a trade sale or a capital markets transaction.
Illumina said in a statement: “While this does not mean the method of divestment has been finalised, the company is pleased to reach an agreement with the EC on specific divestment options as it represents an important milestone in the process.
“In the event of a capital markets transaction, Illumina must capitalise Grail with two-and-a-half years of funding, which is estimated at approximately $1bn based on Grail's long-range plan.”
The company is engaged in developing, manufacturing and commercialising next-generation sequencing systems including sequencing instruments, consumables and related services.
Healthcare company Grail is engaged in developing blood-based cancer tests based on genomic sequencing and data science tools.
European Commission executive vice-president in charge of competition policy Margrethe Vestager said: “Today’s decision marks another important step towards restoring competition in the market for the development of early cancer detection tests.
“Illumina’s divestment plan sets out a timely path towards Grail’s independence, by ensuring it continues to be a viable competitor in this important innovation race.”
