Illumina wins grail battle in blow to EU merger power By Reuters

By Foo Yun Chee

BRUSSELS (Reuters) – U.S. gene sequencing company Illumina (NASDAQ: limit Brussels’ merger powers.

Illumina, which founded Grail and spun it off in 2016 to buy it back in 2021 for $7.1 billion, fought the European Commission’s decision to exercise a rarely used power called Article 22 to review the deal, even though it was below the EU merger revenue threshold.

The case has been closely watched by companies wary of EU scrutiny of smaller deals, but what regulators fear could be so-called killer acquisitions where big companies buy startups to shut them down.

However, it could have limited implications for Illumina, which divested from Grail in June to comply with an EU order, retaining a 14.5% minority stake.

In 2022, the EU General Court ruled in favor of the Commission after Illumina challenged the EU’s merger review, which was triggered by requests from several EU countries.

The Superior Court of Justice of the European Union (CJEU), however, sided with Illumina.

“The Court of Justice annuls the judgment of the General Court and annuls the decisions by which the Commission accepted the requests of the national competition authorities in order to examine the proposed concentration,” the CJEU judges said.

“The Commission is not authorized to encourage or accept notifications of proposed concentrations without a European dimension from national competition authorities where those authorities are not competent to examine those proposed concentrations under their own national law,” they said.

The Commission, the EU’s competition watchdog, blocked the deal in 2022 and ordered Illumina to divest Grail. It also fined Illumina 432 million euros ($478 million) to close the deal in 2021, before getting its approval.

Illumina said the CJEU ruling meant it did not have to pay the fine.

“Today’s ruling confirms Illumina’s long-held view that the European Commission overstepped its authority by asserting jurisdiction over this merger. The basis of the 432 million euro fine has now been eliminated and will no longer be payable,” the statement said.

The decision is final and cannot be appealed.

The commission said it would carefully study the ruling and its implications.

“More generally, we will consider the following steps to ensure that the Commission is able to review those few cases where an agreement would have an impact in Europe but otherwise does not meet the EU’s notification thresholds,” it said communicated.

The cases are cases C-611/22 P Illumina v Commission and C-625/22 P Grail v Commission.

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