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Illumina Loses Bid to Halt European Review of Grail Deal

NEW YORK – The European Union's General Court ruled on Wednesday that the European Commission's investigation into Illumina's purchase of Grail can continue.

In an order issued Wednesday, the court dismissed a lawsuit filed by Illumina in April 2021, which challenged the investigation on jurisdictional grounds. The court also ordered Illumina to cover costs incurred by the Commission (EC).

A spokesperson for the EC Directorate-General for Competition hailed the judgment as an endorsement of its updated approach to referrals for merger review. The case is seen as an early test of new regulations seeking to apply EU merger control rules to deals that did not meet previous requirements for review, such as those involving companies like Grail that do not have significant revenues.

Illumina intends to appeal the decision to the EU Court of Justice, a company spokesperson said in an email. "We remain focused on obtaining clearance of the deal. We continue to work with the EC to reach a resolution."

But the ruling blocks one of the two paths available in Europe that would let Illumina keep the liquid biopsy firm it acquired for approximately $8 billion in August 2021.

The EC's Phase II investigation on the merits of the transaction is ongoing, though currently suspended, and the EC has launched a second investigation into Illumina's decision to forge ahead with the deal despite the review. Illumina has pledged to operate Grail independently under a "hold separate" agreement until the investigation concludes.

The General Court order stems from a December hearing in which it considered arguments related to Illumina's suit. The San Diego-based sequencing technology firm claimed that the EC lacked the "competence" to initiate its review. It also alleged that the EC did not meet certain time-based requirements of the EU merger control regulations.

Had Illumina successfully challenged the EC's jurisdiction, it may have ended review of the deal in Europe.

Illumina also faces pressure from the US Federal Trade Commission, which is seeking to unwind the Grail deal. In that case, the sides recently filed post-trial briefs and responses to the opposing briefs.

In Wednesday afternoon trading on the Nasdaq, Illumina’s shares were down 3 percent at $182.82.