Illumina Faces Mounting Pressure from Regulators Over $8B Grail Acquisition

The European Union regulators are set to order Illumina Inc ILMN to divest its acquisition of cancer test developer Grail. 

The acquisition of Grail also fueled discontent among some of Illumina's shareholders. Activist investor Carl Icahn decried the deal as reckless and pressured the exit of Illumina's longstanding CEO, Francis deSouza, who agreed to step down in June.

This decision follows Brussels' imposition of a €432 million fine on Illumina in July, asserting the company's defiance of regulatory authority.

The legal tussle between Illumina and the EU commenced in 2021 when the acquisition of Grail was completed, despite ongoing scrutiny by EU regulators to assess its potential impact on competition. 

A year later, Brussels blocked the transaction, citing concerns about stifling innovation and limiting consumer choice.

Notably, Illumina contested the EU's jurisdiction in scrutinizing the deal, emphasizing Grail's absence of revenues in Europe. Despite these objections, the deal was sealed in August 2021. 

Illumina has also encountered opposition from the US Federal Trade Commission, which demanded the sale of Grail in April, citing concerns about its impact on cancer detection efforts. 

Citing sources close to the matter, the Financial Times report indicates that Brussels may issue the order for Illumina to sell Grail as early as next week, although the timing remains uncertain. 

Grail is backed by prominent investors like Bill Gates and Jeff Bezos. 

Price Action: ILMN shares are down 0.44% at $139.40 during the premarket session on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.