Illumina challenges Brussels over every block on Grail merger

Illumina challenges Brussels over every block on Grail merger

US biotech giant Illumina is appealing a pending decision by regulators in Brussels to block its $8 billion acquisition of cancer screening start-up Grail, a ruling that would put the EU at odds with a favorable decision in the US.

Illumina plans to take the EU to court because the bloc’s regulators have no jurisdiction over a merger involving two US companies and where the target has no revenue in Europe, two people with direct knowledge of the move said.

An administrative judge last week ruled in favor of the deal in the US, a blow to the US Federal Trade Commission’s attempt to dissolve the deal.

The latest developments come at a time when regulators are increasingly trying to work together on whether or not to close a deal. Blocking a transaction in the EU is extremely rare: less than 5 percent of checked persons are confronted with a negative result.

Brussels will block the deal as early as Tuesday, despite Illumina’s attempts to pause the process so regulators can analyze the ruling in the US. Illumina and the European Commission, the EU’s executive arm, declined to comment.

As part of its appeal, Illumina will also argue that it has no real competitors and that the EU will effectively prevent saving lives by blocking a deal that aims to scale up early-stage cancer screening tests.

The company will point to the US ruling, which the FTC has appealed, as evidence that Brussels is making a mistake in opposing the transaction.

Regulators in Brussels are eager to use this merger as an example of the growing reach of the EU’s power. A Luxembourg court recently ruled that the EU had jurisdiction to investigate the deal, despite opposition from Illumina. It is rare for regulators to come to opposing views when it comes to approving a merger.

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