A PYMNTS Company

Illumina’s $7.1 Billion Grail Acquisition Hits Snag with FTC Review

 |  December 17, 2023

Illumina’s planned $7.1 billion acquisition of cancer test developer Grail has encountered a hurdle as the U.S. appeals court sent the case back to the Federal Trade Commission (FTC). The Fifth Circuit Court of Appeals acknowledged the anticompetitive concerns raised by the regulator but raised questions about the standard used in the evaluation.

The court, in a 34-page opinion issued on Friday, determined that while the combination is likely to “substantially lessen competition,” the Commission employed a standard inconsistent with the language of the Clayton Act. Consequently, the appeals court vacated the Commission’s order and instructed a reconsideration at the FTC.

The initial FTC order in April mandated Illumina to divest Grail, a decision echoed by the European Commission in October. Illumina responded to the ruling, stating, “We are reviewing the decision,” according to several media outlets, reported Wall Street Journal.

Related: FTC Orders Illumina To Divest GRAIL To Protect Competition

Illumina took proactive steps on Monday by filing a draft registration statement with the U.S. Securities and Exchange Commission (SEC) for a potential divestiture of its Grail unit. This move follows the European order against the acquisition. Illumina, based in San Diego, California, added that if it succeeds in an impending legal challenge against the European Commission’s decision, it could invalidate the basis for the order.

However, should Illumina fail in the legal battle or face an adverse ruling from the U.S. Fifth Circuit Court of Appeals, the company is prepared to move forward with the divestiture.

Reports from late last month indicated that Illumina has received interest from various parties regarding the acquisition or investment in its Grail cancer test detection unit, acquired for approximately $7 billion in 2021. The unfolding developments in the legal and regulatory landscape add complexity to Illumina’s strategic plans for Grail, raising questions about the future ownership and direction of this critical cancer testing technology.

Source: WSJ