Illumina Wins Court Ruling Against EU Investigation

By Foo Yun Chee
BRUSSELS (Reuters) – U.S. gene sequencing company Illumina (NASDAQ:ILMN) has won its court battle against the European Union regarding its $7.1 billion acquisition of cancer diagnostic test maker Grail. This ruling is expected to limit Brussels’ merger scrutiny powers.

Illumina originally founded Grail and spun it off in 2016, only to re-acquire it in 2021 for $7.1 billion. It contested the European Commission’s use of Article 22 to review this acquisition, despite its revenue falling below the EU merger threshold. This case held significant implications for companies concerned about EU monitoring of minor transactions, which regulators fear could lead to killer acquisitions — where larger companies buy and shut down startups, notably in technology and pharmaceuticals.

Despite this victory, Illumina’s implications may be restricted as the company spun off Grail again in June to adhere to EU orders while retaining a 14.5% minority stake.

In 2022, the EU’s General Court supported the Commission after Illumina’s appeal against the EU merger review initiated by various EU countries.

The Court of Justice of the European Union (CJEU) sided with Illumina, stating, “The Commission is not authorized to encourage or accept referrals of proposed concentrations without a European dimension from national competition authorities…”. It emphasized the importance of adhering to the revenue threshold for merger reviews, which guarantees legal certainty for businesses.

In 2022, the Commission initially blocked the Grail deal, ordering Illumina to divest and imposing a 432 million euros ($478 million) fine for completing the transaction prematurely.

With the CJEU ruling, Illumina no longer has to pay this fine, and its appeal against the deal’s EU veto is now moot. “Today’s judgment confirms Illumina’s view that the European Commission exceeded its authority,” the company stated, adding that the basis for the fine is now nullified.

This ruling is conclusive and cannot be challenged. EU antitrust chief Margrethe Vestager stated she would carefully analyze the judgment and its consequences, looking into future steps for cases impacting Europe that do not meet EU notification thresholds.
The cases involved are C-611/22 P Illumina v Commission and C-625/22 P Grail v Commission.
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