Dive Brief:
- The European Court of Justice, setting aside a lower court’s judgment, ruled Tuesday that the European Commission did not have the authority to investigate Illumina's $8 billion acquisition of Grail because the deal fell outside of its jurisdiction.
- As a result, San Diego, California-based Illumina will not have to pay a fine of 432 million euros imposed by the EC last year for acquiring cancer test developer Grail, in a legal win for the gene sequencing company. The sum equates to $476 million, Illumina said in an email.
- “Today's judgment confirms Illumina's long-standing view that the European Commission exceeded its authority by asserting jurisdiction over this merger,” Illumina said in a Tuesday statement. “The basis for the 432 million euro fine has now been removed and will no longer be payable.”
Dive Insight:
Grail, which develops blood tests for the early detection of cancer, is now an independent public company following its spinoff from Illumina in June. Illumina ultimately agreed to divest the business after facing intense pressure from U.S. and European antitrust regulators and activist investor Carl Icahn.
The EC launched its investigation of the Grail deal due to concerns it would limit competition in the emerging market for blood-based early cancer detection tests. Illumina completed the acquisition in 2021 despite the ongoing probe, triggering the fine and orders to divest Grail. The 432 million euro fine was the maximum penalty the EC could impose.
Illumina’s move also prompted a proxy challenge from Icahn that led to the ouster of Chairman John Thompson and resignation of CEO Francis deSouza.
“The ECJ ruling is final … and marks the close of this painful chapter,” Evercore ISI analyst Vijay Kumar said in a note to clients.
Illumina maintains a 14.5% minority share in Grail and continues to support the company with its sequencing technology.
The U.S. Federal Trade Commission dismissed its case against Illumina and Grail in August following the spinoff.
