EU imposes record $476 million fine on Illumina for Grail purchase

US genetic testing company Illumina was fined Wednesday for the European Union with a record 432 million euros ($476 million) for closing its acquisition of cancer test maker Grail before obtaining EU antitrust approval.

Illumina has had to deal with the EU competition authority on several occasions since being forced to apply for its approval in 2021, despite the fact that the deal did not meet the EU turnover threshold to be approved. examined.

The deal was finally blocked last September as regulators worried that illuminateonce Grail was acquired, would have an incentive to prevent Grail’s competitors from grail access its technology to develop blood-based cancer screening tests to compete with Grail.

The European Commission said the deliberate decision of illuminate rushing, because he thought the potential profits were worth the possible forced sale of Grail, he supported the amount of the fine, which amounted to 10% of its global revenue and the maximum allowed under EU merger rules for such infringements .

The Commission’s decision confirms a Reuters article from January.

Regulators had come up with a much higher figure, but reduced it to €570 million to account for Illumina’s decision to keep grail as a separate company after closing the deal, an EU official said. That figure was then reduced to the ceiling of 10%.

By closing the deal prematurely, illuminate could exert a decisive influence on grailsaid the person in charge of the EU, who described the maneuver as unprecedented and a very serious infraction.

“If the companies merge before receiving our approval, they violate our rules. Illumina and Grail did this knowingly and deliberately by pulling off their merger while we were still investigating.”Margrethe Vestager, the EU’s head of antitrust, said in a statement.

grail received a token €1,000 fine for its active role in the breach, the first time a target company has been penalized.

illuminate criticized the fine for “illegal, inappropriate and disproportionate” and said that he would appeal the sanction. He has set aside US$458 million, representing 10% of his consolidated annual revenue for fiscal 2022, for the penalty.

“We closed the transaction in 2021 because there was no impediment to closing it in the United States and the timetable for the transaction would have expired before the European Commission could make a decision on the meritsthe company said in a statement.

“The timing of the transaction was based on public statements by the European Commission that it would not exercise its jurisdiction over mergers of this type until new guidelines were published, and yet the European Commission exercised its jurisdiction over the merger before publishing the promised guidelines”.

The company has challenged the EU’s veto on the deal, its decision to review it despite not meeting the EU’s merger criteria and the EU’s order to keep grail separate so you can undo the operation.

According to illuminatesuccess in the second case would nullify the EU fine and expects the EU Court to rule in late 2023 or early 2024.

Ilumina has also appealed the US Federal Trade Commission’s (FTC) order to divest from Grail.

Source: Reuters