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Illumina fined $476 million by EU for premature Grail acquisition
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Illumina has been fined €432 million (around $476 million) by the European Union for the early completion of its acquisition of Grail.
The European Commission found the biotech company sealed the deal before receiving approval from the EU's antitrust regulator.
The agency, citing a violation of the rule that requires firms to suspend mergers during probes, imposed the maximum fine of 10 percent of Illumina's global annual revenue.
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The commission also imposed a symbolic fine of €1,000 on Grail for its involvement in the infringement.
Illumina, which voluntarily maintained Grail as a separate unit and followed the commission's interim measures, has appealed the EU's decision to block the merger.
The fine adds to Illumina's ongoing challenges, including the recent resignation of its CEO, Francis deSouza, following a proxy battle with activist investor Carl Icahn.
EU watchdogs rejected the $7.1 billion deal, saying it would stifle innovation and curtail options in the emerging market for early-cancer-detection blood tests.
In addition to the EU's opposition, US antitrust authorities have also opposed the merger and have ordered Illumina to unwind the acquisition.
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Illumina is appealing the decision in the US.
The European Commission said both the companies knowingly and intentionally broke its rules by finalizing the deal during the investigation.
The commission said Illumina weighed the risk of a fine against the potential high breakup fee and considered the profits it could generate even if it had to divest Grail later on.
Illumina has challenged both the EU's rejection of the Grail deal and the agency’s jurisdiction to review the merger, with a decision on the latter expected later this year or early next.
The case is considered unique due to the broader application of the commission's merger review powers, deviating from its usual revenue-based standards.
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