EU alleges Illumina, Grail breached merger rules, could face fines
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The European Commission (EC) sent a statement of objections to Illumina (NASDAQ:ILMN) and Grail alleging that the companies breached the EU Merger Regulation by implementing the merger while the agency's investigation into the proposed transaction was still ongoing.
"If companies jump the gun and implement deals that are subject to our review, they undermine the effective functioning of our EU merger control system," said Executive Vice-President Margrethe Vestager, in charge of competition policy.
Vestager added, "that this could result in hefty fines."
The EC said that if it concludes that Illumina and Grail did implement the transaction prior to the completion of the Commission's in-depth investigation, it could impose a fine of up to 10% of each companies' annual worldwide turnover.
In the Statement of Objections, the EC has taken a preliminary view that the two companies actually implemented the acquisition before the Commission's in-depth investigation into the transaction was completed.
The EC, however, noted that sending the Statement of Objections does not prejudge the final outcome of the investigation and the companies will now have the opportunity to respond to the objections.
Earlier in July, the General Court of the European Union, upheld a decision by the EU's competition authority that Illumina's proposed $8B acquisition of cancer test developer Grail was subject to EU scrutiny even though it did not meet the EUâs traditional, revenue-based criteria for review.
In July 2021, the EC had started a probe over concerns that proposed acquisition may reduce competition and innovation in the market of developing and commercializing cancer detection tests based on sequencing technologies.
The EC said that on Aug. 18, 2021, Illumina publicly said that it completed its acquisition of Grail, even though the Commission's review was still ongoing.
The EC noted that an early implementation of transactions in breach of EU merger review rules and was a serious infringement.