It is a rather daring snub, and which did not fail to irritate Brussels. Ignoring the investigation still underway by the European Commission, the global DNA sequencing giant, the American Illumina, announced, Wednesday August 18, the finalization of the buyout for 7.1 billion dollars (6 billion euros) from his compatriot Grail, a biotech company specializing in the early detection of cancer.
“The regulators of the European Union [UE] review the transaction, but a decision is expected after the expiration of the agreement ”, justified the Californian company, during the announcement. Illumina had until December 20 to complete the Grail buyout, otherwise it would have had to pay biotech a $ 300 million termination fee.
Not enough to soften Brussels, which replied, Friday, August 20, by opening another investigation, this time to assess whether this hasty takeover constitutes a violation of the standstill obligation of European regulations, which stipulates companies to wait the green light from the EU in the event of an investigation into an acquisition project. “ We deeply regret Illumina’s decision (…). Companies must respect our competition rules and procedures ”, commented EU Competition Commissioner Margrethe Vestager. The company faces a fine that can reach up to 10% of its turnover.
Fear for “competition and innovation”
One more episode in the saga of this redemption. Little known to the general public, Illumina designs, manufactures and sells DNA sequencing machines to hospitals and research laboratories around the world. It was in particular on one of its devices that, on January 11, 2020, the first complete sequencing of the Covid-19 genome was carried out.
A year ago, the American announced its intention to acquire the young biotech Grail, its former subsidiary. Founded in 2016 with the support of a host of investors, including Amazon boss Jeff Bezos and billionaire Bill Gates, the latter has developed an innovative test for the early detection of cancer, which has begun to be marketed. in June. From a blood test, it is able to detect, thanks to genomic sequencing, the signs of around fifty types of cancer in patients who are still asymptomatic.
However, the project came up against the European competition authorities. At the request of France, the Commission decided at the end of April to examine the takeover, fearing that the operation would “Reduce competition and innovation”. Brussels fears that Illumina, in a dominant position, will increase the prices of its sequencers or degrade their quality for Grail’s competitors. Illumina retaliated by launching an action – still in progress – at the Court of Justice of the EU, challenging the jurisdiction of Brussels on the case. Europe is not the only one to wonder about this takeover. The American Competition Authority also took up the case. Tuesday, August 24, an administrative trial should open in the United States to rule on the subject.