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European Commission Approves Illumina's Plan for Divesting Grail

NEW YORK – The European Commission said on Friday that it has approved Illumina's plan to divest Grail.

Whether Illumina will sell Grail to another firm or pursue a capital markets transaction such as an initial public offering is yet to be determined, but either option has the blessing of the EC.

In a statement, Illumina said that the divestment method has not been finalized and that it continues to explore both routes.

"In the event of a capital markets transaction, Illumina must capitalize Grail with two-and-a-half years of funding, which is estimated at approximately $1 billion based on Grail's long-range plan," Illumina said in a statement. The plan also has provisions for restoring Grail's independence to what it enjoyed prior to the acquisition and for strict deadlines leading to a sale in a timely manner.

Illumina said the approval represents an "important milestone in the process" and that it "looks forward to working with the EC on approval of final terms consistent with the divestment plan."

The divestment plan comes from the October 2023 order from the EC for Illumina to divest Grail, which included measures to restore the competitive situation to what it was prior to the acquisition.

Illumina announced its plan to acquire Grail in late 2020, in a deal valued at approximately $8 billion. Both the EC and the US Federal Trade Commission investigated the deal and ultimately both sought to unwind it. Shareholder dissent led to a shakeup on Illumina's board and the exit of its former CEO Francis deSouza. In December, Illumina said it would divest Grail.

Illumina reiterated that it plans to finalize the divestment terms by the end of the second quarter.

In Friday morning trading on the Nasdaq, shares of Illumina were up almost 3 percent at $134.30.