Illumina Faces Record Fine From EU Over Unapproved Acquisition: Update

(RTTNews) - Illumina, the world's largest gene sequencing company, has been hit with a record fine by the European Union or EU after completing an $8 billion acquisition without obtaining approval from Brussels.

The European Commission imposed a penalty of 432 million euros, equivalent to 10 percent of Illumina's revenue, which is the maximum fine for such infringements. The dispute between Illumina and the EU began in 2021 when Illumina proceeded with the purchase of cancer test developer Grail while EU regulators were still examining the potential impact on competition.

The EU regulators ultimately decided to block the transaction a year later, citing concerns that the deal would stifle innovation and limit consumer choice. Illumina had challenged the EU's authority to scrutinize the deal, arguing that Grail does not generate any revenues in Europe. However, the European Commission emphasized that EU merger rules require companies to refrain from implementing mergers until they receive approval. This is considered a crucial aspect of the European merger control system, allowing the commission to fulfill its role before structural changes disrupt the competitive landscape.

By imposing the maximum penalty, EU authorities aim to deter other companies from disregarding the approval process as Illumina did. The fine levied against Illumina surpasses the previous largest penalty for a similar infringement, when telecoms group Altice was fined 125 million euros, equivalent to 1 percent of its revenues. Illumina has expressed its intention to appeal the fine, stating that it believes the penalty is unlawful, inappropriate, and disproportionate.

Illumina's completion of the acquisition also sparked a challenge from activist investor Carl Icahn, who criticized the deal as reckless and advocated for the departure of Illumina's CEO, Francis deSouza. In June, deSouza agreed to step down. Grail, the cancer test developer that was acquired by Illumina, aims to create a screening test for various cancers in individuals without symptoms. Illumina has accused Brussels of endangering lives by blocking a deal that seeks to bring a blood test for screening multiple cancers to the market.