DealLawyers.com Blog

September 13, 2022

Antitrust: EC Blocks Deal That FTC Judge Wouldn’t

Less than a week after an FTC administrative judge dismissed the agency’s challenge to Illumina’s acquisition of Grail, the EC rode to the FTC’s rescue and blocked the deal.  The FTC’s challenge focused on the fact that the deal involved the purchase of a nascent competitor, and that caught the EC’s eye as well.  Here’s an excerpt from this WilmerHale memo on the implications of both regulators’ efforts to stop the transaction: EC’s decision:

The Illumina/Grail saga, at both the EC and the FTC, is a striking example of competition authorities’ intensive focus on both vertical transactions and on preserving nascent competition. Parties contemplating a potentially controversial transaction are well-advised to adopt a multi-jurisdictional approach and carefully account for the risk of a prohibition when negotiating contractual terms.

Illumina/Grail is also a reminder that potentially controversial non-notified transactions – which have long faced a risk of investigation by the U.S. antitrust authorities and the UK Competition and Markets Authority – now face a risk at the EC under Article 22 as well. That risk – particularly acute when a deal is not reportable because the target has little if any revenue, but the deal nonetheless could raise competition concerns – will increase if there are any complaints from customers, competitors, or disappointed competing bidders for the target that an authority deems plausible.

Since the deal already closed, the EC is pondering what to do next, and the memo says that the possibility of ordering the transaction unwound is on the table.

John Jenkins