The European Commission has opened an in-depth investigation to assess the proposed acquisition of GRAIL by Illumina, under the EU Merger Regulation.
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The Commission is concerned that the proposed acquisition may reduce competition and innovation in the emerging market for the development and commercialisation of cancer detection tests based on sequencing technologies.
Illumina is a global health technologies company, and leading supplier of next generation sequencing (“NGS”) systems for genetic and genomic analysis, which include NGS instruments, consumables and ancillary services.
GRAIL is a customer of Illumina, and develops cancer detection tests relying on NGS systems.
Following its preliminary investigation, the Commission has concerns about the impact of the transaction on the development and supply of NGS-based cancer detection tests.
The Commission is concerned that, as a result of its combination with GRAIL, Illumina could engage in vertical input foreclosure strategies given its leading position in the NGS systems that are crucial inputs for the development and commercialisation of NGS-based cancer detection tests.
The preliminary investigation suggests that Illumina could have the ability to engage in these foreclosure strategies given its leading position in NGS systems and that Illumina could have an economic incentive to foreclose GRAIL's rivals.
Such foreclosure strategies could have an adverse impact on GRAIL's rivals and European patients, in particular by hampering innovation, reducing the choice, innovative features and performance of products available to patients, doctors and health systems, and increasing barriers to enter the NGS-based cancer detection tests space.
The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.
The proposed transaction was notified to the Commission on 16 June 2021. The Commission now has 90 working days, until 29 November 2021, to take a decision. The opening of an in-depth inquiry does not prejudge the outcome of the investigation. ■
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