Dive Brief:
- Illumina has failed to block a European Union competition investigation into its $8 billion takeover of liquid biopsy player Grail.
- The genome-sequencing specialist sought to remove a threat to the deal by challenging the legality of the antitrust case. In a departure from normal EU practice, the European Commission will scrutinize the merger despite it falling short of the revenue threshold.
- By siding with the European Commission, Europe’s second-highest court, the General Court, has cleared the EU to resume a review that could lead to it blocking the deal and fining Illumina.
Dive Insight:
The case heard at the General Court is part of an attempt by Illumina to defend its takeover. Having closed the deal before getting EU clearance, the San Diego-based company has mounted a two-front defense of the takeover by challenging the Commission in the courts and seeking to gain clearance through the regulatory review process.
Last week, the legal side of the defense was set back when the General Court upheld the Commission’s decision to accept a referral request to assess the Illumina-Grail merger. The referral request allowed the Commission to deploy a rarely used antitrust power to look into the takeover.
In assessing the legality of the process, the court ruled that the Commission “is competent” to examine a merger when it receives a request from an EU member state. The court ruling applies to requests from member states that have a national merger control system but are unable to review the deal themselves because of the limited scope of their national legislation.
Illumina previously predicted the legal battle could continue until 2025, suggesting a willingness to appeal to Europe’s highest court.
The Commission has said Illumina potentially could be forced to sell Grail and pay a fine of up to 10% of its annual sales as punitive action.
