EU Approves Illumina’s Divestment Plan for Grail After Two-Year Battle

US-based gene sequencing giant Illumina has received clearance from European Union antitrust regulators to proceed with its long-anticipated divestment of cancer diagnostic test maker Grail.

According to a report by Reuters, Illumina’s plan to divest Grail has been given the green light by EU authorities, who previously expressed concerns about the potential stifling of innovation and reduction of choice in the emerging market for blood-based early cancer detection tests.

The saga began when Illumina, which originally founded Grail and later spun it off in 2016, re-acquired the company in 2021 for a staggering $7.1 billion. However, Illumina proceeded with the acquisition before obtaining regulatory approval from the EU, prompting the European Commission to intervene. In response, the commission ordered Illumina to keep Grail separate and fined the company 432 million euros ($459.48 million).

Related: Carl Icahn Says Illumina’s Appeal To FTC Order To Divest Is An “Impossible Battle”

Despite Illumina’s subsequent efforts to address the concerns raised by EU regulators, the deal was vetoed again in 2022. This setback prompted the company to explore options for divesting Grail while ensuring its continued viability and competitiveness in the market.

In a statement released on Friday, the European Commission announced that it had reached an agreement with Illumina regarding specific divestment options. However, the method for divestment has yet to be finalized.

“The divestment plan foresees that Illumina can select the appropriate divestment method (either via a trade sale or a capital markets transaction),” the Commission stated.

The commission emphasized that the divestment would restore Grail’s independence and enable it to operate as a viable and competitive business entity. By allowing Grail to function independently, EU regulators aim to preserve innovation and promote competition in the rapidly evolving field of cancer diagnostics.

Source: Reuters