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Illumina/GRAIL acquisition: first use of the European Commission’s new referral policy

The European Commission has recently made an important policy change in relation to merger control referrals. The Commission is now encouraging national competition authorities (NCAs) to refer to it some transactions which it thinks deserve to be reviewed at EU level, whether or not those authorities had the power to review the case themselves.

The NCAs – and in particular the French Competition Authority (FCA) – decided to take advantage of this change of doctrine soon after its implementation, in the context of the high-profile Illumina/GRAIL transaction. The Commission accepted the referral request and told Illumina not to proceed with the acquisition before it was cleared under the merger control rules. However, while the Commission’s investigation was still ongoing, Illumina announced that it would complete the deal, albeit with certain safeguards. The Commission initiated an investigation to determine whether this constituted a breach of the parties' standstill obligation.

The Commission took a step forward on 29 October by imposing an unprecedented series of interim measures on the parties. These include the obligation for GRAIL and Illumina to remain separate, the appointment of one or more independent hold separate managers to ensure the separation of the businesses in the exclusive interest of GRAIL, and the obligation for GRAIL to actively seek alternatives to the concerned acquisition in order to prepare should the Commission decide to prohibit the transaction.

Our alert gives you the headline points from this ground-breaking case (including Illumina’s appeal to the General Court seeking annulment of the FCA’s referral request). And we put the case in the wider context of vigorous enforcement at both French and EU-level in relation to early completion or failure to notify mergers.