The European Commission has sent a Statement of Objections alleging that Illumina and GRAIL breached the EU Merger Regulation by implementing the acquisition while the Commission's in-depth investigation into the proposed transaction is still ongoing.
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On 22 July 2021, the Commission opened an in-depth investigation over concerns that the proposed transaction may reduce competition and innovation in the market for the development and commercialisation of cancer detection tests based on sequencing technologies.
On 18 August 2021, while the Commission's review was still ongoing, Illumina publicly announced that it had completed its acquisition of GRAIL. The EU Merger Regulation requires that merging companies do not implement transactions unless and until they have been notified and cleared by the Commission.
This otherwise called the “standstill obligation†prevents the potentially negative impact of transactions on the market, pending the outcome of the Commission's investigation.
The early implementation of transactions in breach of EU merger review procedural obligations is a very serious infringement, as it undermines the effective functioning of the EU merger control system.
On 20 August 2021, the Commission opened an investigation to assess whether Illumina breached the ‘standstill obligation'.
In the Statement of Objections, the Commission takes the preliminary view that Illumina and GRAIL actually implemented the acquisition prior to the conclusion of the Commission's in-depth investigation into the transaction.
If the Commission were to conclude that Illumina and GRAIL did implement the transaction prior to the conclusion of the Commission's in-depth investigation, it could impose a fine of up to 10% of each companies' annual worldwide turnover.
The sending of a Statement of Objections does not prejudge the final outcome of the investigation. GRAIL and Illumina now have the opportunity to respond to the Commission's Statement of Objections. ■