The European Commission on Thursday, October 12, ordered the American biotechnology company Illumina to cancel the takeover of its compatriot Grail, concluded in 2021 for 7.1 billion dollars (6.7 billion euros). The merger had already been banned in September 2022 by the Commission because it feared that this takeover “Hinders innovation and reduces supply in the emerging market for early cancer detection blood tests”.
Grail is one of the companies trying to develop these kinds of tests, which analyze blood samples or other fluids through DNA sequencing. Illumina was not in direct competition with Grail, but was the only company offering viable DNA sequencing solutions for this type of testing.
The European executive said it had adopted “remedial measures requiring Illumina to cancel the acquisition of Grail”, in a press release. In the event of non-compliance, the Commission may impose penalties of up to 5% of the company’s daily turnover. Illumina also faces a fine of up to 10% of its annual global turnover for violating the European merger regulation.
In July, Brussels had already imposed a fine of 432 million euros on Illumina for having carried out this acquisition without the agreement of the competition authority of the European Union (EU). “This is the first time that companies have openly carried out their operation while we are conducting a thorough investigation”Margrethe Vestager, then competition commissioner, was indignant when announcing the ban on the merger.
In the eyes of Brussels, this is a “killer acquisition”, a type of operation where the large company in a sector buys a promising start-up just as it is starting to take off, in order to prevent it from becoming a rival. The Commission, which ensures compliance with the rules to protect competition in the Union, decides on mergers and acquisitions operations having a significant potential impact on the European market, even when the companies concerned do not have their headquarters in the EU.