Illumina has closed its US$8 billion takeover of liquid biopsy player Grail despite an ongoing regulatory review by the European Union and pending US Federal Trade Commission administrative trial.
With the deal set to expire before regulators reached their decisions, Illumina has taken the potential risk that it will need to unwind the takeover down the line in response to regulatory opposition. For now, Illumina is holding off on integrating Grail pending the regulatory and legal reviews.
Evercore ISI analysts called it a “maverick move” to close the deal ahead of EU and US regulatory clearances as regulators attempted to “run down the clock and use every available delaying tactic.” However, a Cowen analyst said it was a “pretty aggressive” move that risks “causing distraction and wasted efforts.” While Illumina stated the European Commission will likely respond by trying to impose a fine of 10% of its consolidated annual turnover, CEO Francis deSouza told investors the deal will save lives.
Illumina said in a statement that it would hold Grail as a separate company during the European Commission’s ongoing review. The announcement comes in the middle of a quiet period in Brussels, with many officials enjoying a summer break.
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