Illumina hit with record $476 million fine for closing Grail deal without EU approval

European Union regulators on Wednesday fined Illumina a record 432 million euros ($476 million) for closing its acquisition of cancer test developer Grail without first securing regulatory approval. 

The European Commission’s fine amounts to 10% of San Diego-based Illumina’s turnover, the maximum allowed under E.U. merger rules.

The Illumina fine exceeds the commission’s previous largest merger regulation fine of $125 million, or 1% of annual turnover, imposed on telecommunications company Altice in 2018. 

An Illumina spokesperson on Wednesday said the DNA sequencing company would appeal the fine. Illumina has already put aside $453 million to cover a potential maximum fine of 10% of turnover, according to a regulatory filing from earlier this year. 

And the deal has already cost Illumina great sums of money. The company’s market value has fallen to roughly $29 billion from around $75 billion in August 2021, the month it closed its acquisition of Grail. 

But Illumina maintains that the transaction would “maximize value for shareholders” and save lives. 

The commission said in a release that Illumina “strategically weighed up the risk of a gun-jumping fine against the risk of having to pay a high break-up fee if it failed to takeover Grail.” Gun-jumping refers to the act of completing a merger before it receives regulatory clearance.

Illumina also “considered the potential profits it could obtain by jumping the gun, even if it were ultimately forced to divest Grail,” the commission said. “It then intentionally decided to proceed and to close the deal while the Commission was still investigating the transaction that was ultimately prohibited.” 

“This is a very serious infringement, which requires the imposition of a proportionate fine, with the aim of deterring such conduct,” the European Commission continued.

The commission added that Grail “played an active role in the infringement.” It issued Grail, which is based…