Fu Yun Chi
BRUSSELS (Reuters) – U.S. gene sequencing company Illumina’s (NASDAQ:) plan to sell cancer diagnostic test maker Grail was given the green light by EU antitrust regulators on Friday after blocking the deal two years ago.
The company said it had reached an agreement with the European Commission on specific sale options, but the method had not yet been finalized.
Illumina founded and spun off Grail in 2016, but reacquired it in 2021 for $7.1 billion to enter the early cancer detection market before first seeking EU regulatory approval.
That prompted the commission, which acts as the competition authority for the 27-nation European Union, to order the company to keep Grail separate from Illumina.
The subsequent investigation resulted in a €432 million ($459.48 million) fine for Illumina and an order to sell Grail.
The EU watchdog vetoed the deal again in 2022, saying it would stifle innovation and reduce choice in the emerging market for blood-based early cancer detection tests.
San Diego-based Illumina said it is exploring options for the sale of Grail, with final terms expected to be agreed upon by the second quarter of 2024.
“The plan of sale provides that Illumina may select an appropriate method of sale (either through a trade sale or a capital market transaction),” the Commission said.
It said the sale would restore Grail’s independence and allow it to operate as a viable and competitive business.
Under the terms of the order, if Illumina selects a capital market transaction, it must capitalize Grail at the time of the transaction with financing within two and a half years.
Based on the liquid biopsy maker’s long-term plan, Illumina said the funding is valued at approximately $1 billion.
The company also battled US antitrust regulators and faced fierce opposition from activist investor Carl Icahn, who opposed the deal.
($1 = 0.9402 euros)
(Additional reporting by Pratika Jain in Bengaluru; Writing by Nette Noestlinger; Editing by Charlotte Van Campenhout, Jason Neely and Arun Koyyur)