European Union regulators on Wednesday fined Illumina (NASDAQ: ILMN) a record 432 million euros ($476 million U.S.) for closing its acquisition of cancer test developer Grail without first securing regulatory approval.
The fine from the European Commission, the EU’s executive body, amounts to 10% of San Diego-based Illumina’s turnover. That is the maximum allowed under EU 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.
Ironically, ILMN shares leaped $4.31, or 2.3%, to $189.13.
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