European Commission lays groundwork to unwind Illumina's $7B+ Grail merger
The European Commission has recommended steps that — though not yet final — would require Illumina to “swiftly” unwind its controversial $7.1 billion Grail buyout.
The Commission delivered a “statement of objections” on Monday, detailing the process Illumina would need to take in divesting Grail, its blood testing spinout launched in 2016. Illumina re-acquired Grail back in August, despite criticism from both the FTC and EU.
The FTC filed a complaint against the merger last March over concerns that it would stifle innovation for liquid biopsy cancer screening tests called multi-cancer early detection (MCED) tests, which are developed by Grail.
“With this transaction, Illumina would have an incentive to cut off GRAIL’s rivals from accessing its technology, or otherwise disadvantage them,” European Commission EVP Margrethe Vestager said in a statement earlier this year.
Illumina, however, argued that the merger is “pro-competitive and will accelerate innovation.”
“Illumina can make GRAIL’s life-saving multi-cancer early detection test more available, more affordable, and more accessible – saving lives and lowering healthcare costs,” general counsel Charles Dadswell previously said in a news release.
While the FTC complaint was dismissed in September, the EU blocked the acquisition just days later.
In following that decision, the Commission said in its recommendations on Monday that Illumina should “restore GRAIL’s independence from Illumina, to the same level that GRAIL had prior to the completion of the transaction.”
It also proposed that “GRAIL must be as viable and competitive after the divestment as it was before Illumina’s acquisition, to ensure that the innovation race between GRAIL and its rivals can continue as before,” and ensure that Grail and Illumina remain separate until the businesses are unwound.
The recommendations are not yet final, leaving room for both Grail and Illumina to respond. Illumina told Endpoints News in an emailed statement that it has appealed the EU’s September decision to prohibit the deal, and that the “divestment order should be stayed” until the appeal is resolved.
“We believe divestment is not proportional to the speculative harm alleged by the Commission, especially given the benefits this merger will bring to patients in the EU and across the globe,” a spokesperson said. “Illumina has separately appealed a July 2022 decision by the General Court of the European Union regarding the European Commission’s jurisdiction to challenge the GRAIL deal.”