Illumina, the leading producer of gene-sequencing machines, announced Sunday that it would sell Grail, a cancer test developer that it purchased for $7.1 billion in 2021.
The move came two days after Illumina lost its case in a federal appeals court, which largely upheld a Federal Trade Commission ruling that Illumina should unwind its deal with Grail on antitrust grounds.
The case was seen by antitrust experts as a test of regulators’ efforts to stop big companies from buying fledgling innovators.
The deal had also faced a roadblock in Europe. In September 2022, the European Union said it would block the acquisition. Illumina, based in San Diego, previously stated publicly that if it was unsuccessful with appeals in either jurisdiction, it would divest the start-up.
“We are committed to an expeditious divestiture of Grail in a manner that allows its technology to continue benefiting patients,” Illumina’s chief executive, Jacob Thaysen, said in a statement. “The management team and I continue to focus on our core business and supporting our customers. I am confident in Illumina’s opportunities and our long-term success.”
Grail, which has created technology for the early detection of some cancers, began as a research project within Illumina. It was spun out as a separate company in 2016. While it does not compete with Illumina in gene sequencing, it does use gene sequencing in its blood tests for cancer.
Illumina went forward with purchasing Grail, despite an early complaint from the F.T.C., which argued that the acquisition would diminish innovation in the U.S. market and increase prices. Still, Illumina was confident it would win in court.
The sale of Grail will be executed through a third-party sale or a capital market transaction, the company said, with a goal of finalizing the deal by the end of the second quarter next year.
Now that the commission’s challenge to the deal has been upheld in court, other tech giants and dominant companies in their respective fields might see their acquisition attempts curbed by the agency. Since taking office in 2021, Lina Khan, the F.T.C. chair, has taken a more aggressive stance toward mergers that she believes may be detrimental to the economy.
