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Illumina/GRAIL: EU General Court gives green light to below-threshold merger referrals

In a landmark ruling, the EU General Court (GC) has confirmed the European Commission (EC)’s decision to accept a referral request from several Member States for the assessment of gene-sequencing firm Illumina’s acquisition of GRAIL, a company which uses gene sequencing to develop cancer screening tests.

The ruling is a victory for the EC, endorsing its controversial new policy to accept Member State requests to review, under Article 22 of the EU Merger Regulation, transactions which do not meet EU or national merger control thresholds.

Our alert considers the key points raised by the GC’s decision. These include the following:

  • Merging parties – regardless of whether there is a strong nexus to the EU – should take account of a possible Article 22 referral in their transaction documents and timetable, particularly in conditions precedent and when considering allocation of risks. This is particularly the case for deals involving targets which are start-ups, innovators or companies with significant competitive potential in digital or pharma sectors.
  • Article 22 referrals of digital mergers should be expected with the upcoming entry into force of the EU Digital Markets Act.