NEW YORK – Shares of Illumina rose 5 percent to $138.98 in Thursday morning trading on the Nasdaq after a European court official issued an opinion favorable to one of the firm's legal actions.
Advocate General Nicholas Emiliou found that the European General Court erred in its interpretation of the European Union merger regulations when allowing the European Commission to review a deal that neither involved a European company nor passed revenue thresholds for consideration in the country that referred the case to the Commission.
"Emiliou proposes that the court should set aside the General Court judgment and annul the Commission decisions accepting the referral and the requests to join it as well as the Commission's information letter," the Court of Justice of the EU (ECJ) said in a statement.
The opinion is nonbinding, the ECJ noted. "It is the role of the advocates general to propose to the court, in complete independence, a legal solution to the cases for which they are responsible. The judges of the court are now beginning their deliberations in this case. Judgment will be given at a later date."
"If the ECJ accepts the AG's opinion, then Illumina will not have to pay a fine and the divestment order would become null," Evercore ISI analyst Vijay Kumar wrote in a Thursday note to investors. "If the ECJ sides with AG, we would see [approximately] $1.25 billion of value being unlocked ([approximately] $484 million of fines and [approximately] $750 million from lower cash outlay as we don't expect Illumina to foot more than a billion for divesting Grail)."
Illumina filed a lawsuit in April 2021, challenging the European Commission's jurisdiction to review the proposed $8 billion Grail acquisition. In July 2022, the EU General Court ruled that the Commission's investigation could continue. Illumina appealed.
Illumina said in December that it would divest Grail by June, despite a semi-favorable ruling from a US appellate court, where the firm had challenged the US Federal Trade Commission order to unwind the deal.
"Illumina agrees with the Advocate General that the European Commission’s assertion of jurisdiction over this merger was improper, " Illumina said in a statement emailed to GenomeWeb. "Illumina looks forward to the decision of the European Court of Justice. Developments in this case will not delay the ongoing process of divesting Grail, with the goal of finalizing the divestment terms by the end of the second quarter of 2024."