A court ruling in the European Union (EU) giving Brussels the jurisdiction to investigate life sciences firm Illumina’s $8 billion takeover bid of biotech company Grail could set a precedent granting regulators wider oversight of deals regardless of the revenue and other particulars.
The General Court of the European Union upheld a decision by the EU’s competition authority to investigate Illumina’s acquisition deal for Grail despite lacking traditional standards for review, according to multiple media reports on Wednesday (July 13).
Existing merger regulations state that regulators in Brussels have jurisdiction if the company being acquired has a commercial presence in the EU and meets revenue thresholds. Grail has no European revenues.
The ruling gives Brussels a wider range of authority and could lead to it weighing in on deals in more industries like technology and bioscience, Financial Times reported. Illumina and Grail are both U.S.-based firms.
“The Commission has the competence to examine that concentration which did not have a European dimension or fall within the scope of the national merger control rules of Member States of the European Union or States party to the Agreement on the European Economic Area,” according to the ruling.
Illumina is planning to appeal against the decision at the European Court of Justice, stating that the merger will be good for biotech research and will help escalate the fight against cancer, the FT reported.
“We remain focused on obtaining clearance of the deal. We continue to work with the European Commission to reach a resolution,” Illumina said, per the FT.
An appeal can be limited to points of law only and can be brought before the Court of Justice against the decision of the General Court within two months and 10 days of notification of the decision, according to the ruling.
“This is a big deal,” Salomé Cisnal de Ugarte, an antitrust partner at King & Spalding in Brussels, told the FT. “This gives a significant power to Brussels that it didn’t use before and it will encourage member states to refer deals for which they don’t have jurisdiction to the commission to review them.”
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