Illumina (Nasdaq:ILMN) announced today that it received approval of its plan to divest Grail from the European Commission (EC).
In September 2020, Illumina announced an agreement to acquire Grail, a DNA sequencing and array-based tech developer. Grail itself was a startup that initially spun out from the company in 2016.
Illumina completed the acquisition in August 2021 but faced plenty of scrutiny in the years after the announcement.
This all built up to a Dec. 15, 2023, decision from the U.S. Fifth Circuit Court of Appeals. The decision upheld an order from the U.S. Federal Trade Commission (FTC) to unwind the acquisition. The EC ordered Illumina to divest Grail in October. Illumina said last December that it hoped to complete the unwinding by the second quarter of 2024.
According to a news release, EC approval does not mean the divestiture has been finalized. However, Illumina said it is “pleased to reach an agreement with the EC on specific divestment options as it represents an important milestone in the process.
Illumina said it continues to explore divestiture options, including through a trade sale or a capital markets transaction. Each option falls under the plan approved by the EC. In the event of a capital markets transaction, the company must capitalize Grail with two-and-a-half years of funding. It estimates that to total approximatley $1 billion based on Grail’s long-range plan.
“Illumina looks forward to working with the EC on approval of final terms consistent with the divestment plan,” the news release said. “As previously stated, Illumina has a goal of finalizing those terms by the end of the second quarter of 2024.”
