(Reuters) – Illumina’s board has approved the spin-off of Grail, the gene-sequencing machine maker said on Monday, as a deal to bring the company back into the fold three years ago faced huge antitrust scrutiny and opposition from investor Carl Icahn.
Shareholders will receive one share of Grail common stock for every six shares of Illumina (NASDAQ:), which will retain a 14.5% stake in the unit following the June 24 spin-off. Illumina shares rose 4% in extended trading.
The gene sequencing machine maker founded Grail and spun it off in 2016, but reacquired it in 2021 for $7.1 billion to enter the early cancer detection market.
The deal was opposed by antitrust regulators, who feared that Illumina would prevent Grail’s competitors from accessing its technology to develop competing blood-based early cancer detection tests.
EU regulators fined Illumina a record 432 million euros ($471.18 million) last July after the company closed its takeover without receiving antitrust approval.
Grail’s higher-than-expected costs and testing delays also forced Illumina to take a loss that Icahn said in December amounted to $4.7 billion.
($1 = 0.9168 euros)