Brussels announced on Tuesday that it will block a merger between US biotech companies Illumina and Grail, which announced in August 2021 that they had completed their merger without EU approval, although the transaction was recently approved by US courts, writes AFP.

Illumina’s takeover of Grail would “impede innovation and reduce supply in the emerging market of blood tests for early cancer detection,” where Grail competes with other biotechs, the European Commission said in a statement.

Grail is one of the companies trying to develop such tests, which analyze samples of blood and other fluids by sequencing DNA.

Illumina is not in direct competition with Grail, but is currently the only company that offers a viable DNA sequencing solution for this type of test.

“Illumina is currently the only reliable technology provider to develop and process these tests. With this merger, Illumina will have an incentive to deny Grail competitors access to its technology or put them at a disadvantage,” by raising the prices they charge. ., said the European Commissioner for Competition Margrethe Vestager.

In Brussels’ eyes, it’s a “killer acquisition,” the type of deal in which an industry giant buys a promising startup just as it’s starting to grow, to prevent it from becoming a potential competitor.

Founded six years ago, Grail is still very low-margin because its product is still in the development stage, but it has a strong competitive potential: its revenue is expected to grow exponentially, and its technology has the potential to revolutionize cancer treatment.” – he said. Vestager told reporters.

In the United States, the FTC opposed the deal due to the same concerns about the competitive environment, filing a complaint back in March 2021 to prevent Illumina’s $7.1 billion takeover of Graal.

But last week, a US administrative judge ruled in Illumina’s favor – a defeat for the FTC at a time when the FTC, under President Joe Biden, has been tough on mergers and acquisitions it says could weaken competition and harm consumers.

In turn, Brussels threatened Illumina and Grail with sanctions in September 2021, accusing them of completing the merger last month while an investigation by European competition authorities was still ongoing.

“This is the first time that companies have openly implemented their operations while we conduct an in-depth investigation,” said Margrethe Vestager.

Ilumina and Grail will have to “terminate their transaction” to “undo the effects of the merger”: “We will be in close contact with them to make sure this happens in the best possible way, as we have a strong interest in how Grail can move forward as an independent and a strong player in the innovation race,” Vestager said Tuesday.

The Commission, which monitors compliance with EU competition rules, decides on mergers and acquisitions that can have a significant impact on the European market, even if the companies concerned are located outside the EU.

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