The European Commission decided on Tuesday 19 July to issue a statement of objections alleging that US companies Illumina and GRAIL had breached the EU Merger Regulation as the former company acquired the latter while the Commission’s in-depth investigation of the deal was still ongoing.
Margrethe Vestager, Executive Vice-President in charge of competition policy, deplored the fact that these companies had conducted their deal “while the Commission is still carrying out its in-depth investigation”. “This could result in hefty fines”, she warned.
On 22 July 2021, the Commission opened an in-depth investigation (see EUROPE 12768/19) because of concerns that the proposed deal would reduce competition and innovation in the market for the development and marketing of cancer screening tests based on sequencing technologies.
On 18 August 2021, while the Commission’s review was still ongoing, Illumina announced that the acquisition of GRAIL had been completed.
The EU Merger Regulation requires that companies involved in a merger do not implement transactions until they have been notified and cleared by the Commission. This ‘standstill obligation’ avoids the potential negative consequences of transactions on the market pending the outcome of the investigation. The early implementation of transactions in violation of merger control rules is a very serious offence.
If the Commission were to conclude that Illumina and GRAIL had implemented the transaction before the conclusion of its in-depth investigation, it could impose a fine of up to 10% of each company’s annual worldwide turnover. GRAIL and Illumina have the opportunity to reply to the statement of objections.
On 13 July 2022, the General Court of the EU confirmed the Commission’s jurisdiction to review the transaction (see EUROPE 12992/27).
More info: https://aeur.eu/f/2op (Original version in French by Lionel Changeur)