European Commission Orders Illumina to Divest Grail
- 13/10/2023
- News
On 12 October 2023, the European Commission (the Commission) ordered Illumina, the US genomics company that produces next generation sequencing systems, to sell Grail, the developer of blood-based cancer detection tests that result from genomic sequencing, and restore the situation which existed before Illumina had acquired Grail (see, attached Commission press release). Illumina’s acquisition of Grail has spawned numerous procedures and a series of Commission measures, including a decision to prohibit the transaction under the EU Merger Regulation (see, Van Bael & Bellis Life Sciences News and Insights of 7 September 2022) and a decision imposing a “gun jumping” fine on both companies because they had implemented the transaction without waiting for the Commission’s approval (see, Van Bael & Bellis Life Sciences News and Insights of 13 July 2023). Both decisions are under review by EU courts.
In requiring Illumina to divest Grail, the Commission took two sets of what it describes as restorative measures. One such set involves divestment measures, while the second set includes several transitional measures.
Divestment Measures
The divestment measures seek to restore Grail’s independence from Illumina as if the acquisition had not happened. They also try and ensure that Grail attains the level of viability and competitiveness which existed before the acquisition. Lastly, the divestment must be ready to be implemented within specific deadlines (which, for obvious reasons, the Commission does not mention) and should be sufficiently certain to yield a successful outcome. Illumina will have to come up with a plan that observes these principles and is subject to the Commission’s approval.
Transitional Measures
The transitional measures will cover the immediate future until the divestment becomes a reality. They are supposed to ensure that Illumina and Grail remain separate and that Grail continues to be a viable business.
