By Foo Yun Chee
LUXEMBOURG (Reuters) – Illumina on Tuesday slammed EU antitrust regulators for over-extending their powers when they scrutinised the U.S. life sciences company’s $7.1 billion for Grail even though the deal was outside the scope of EU merger rules.
The case underlines the European Commission’s determination to apply a rarely used power called Article 22 to examine so-called killer acquisitions, in which large companies buy smaller rivals in order to shut them down, even if the deals are below the EU merger revenue threshold.
The tougher EU regulatory approach has triggered concerns among companies and start-ups looking for a buyout from bigger rivals.
Illumina took its fight to the Court of Justice of the European Union (CJEU) after it lost its challenge at a lower tribunal last year against the EU competition authority’s 2021 decision to review the deal that it subsequently blocked last year.
“Does the EU merger regulation confer on the Commission the power to control mergers which fall below both the thresholds set out in the merger regulation…? We say the answer is clearly no, it does not,” Illumina’s lawyer Daniel Beard said before the panel of 15 judges.
“Article 22 is a derogation, not a catch all. It is to be construed strictly,” he said.
Commission lawyer Nicholas Khan dismissed Illumina’s arguments.
“Ilumina and Grail’s arguments are… essentially a policy manifesto about what they think should be the jurisdictional limits of EU merger control,” he said.
“Illumina’s arguments are simply a demand to rewrite the merger regulations.”
If it loses its appeal, Illumina, which closed the deal prior to the EU veto, has said it will divest Grail within a year.
The Commission is set to review U.S. chipmaker Qualcomm’s bid for Israeli auto-chip maker Autotalks and the Deutsche Boerse-owned European Energy Exchange’s (EEX) acquisition of Nasdaq’s European power trading and clearing business using its Article 22 power.
The cases are C-611/22 P and C-625/22 P Grail v Commission and Illumina.
(Reporting by Foo Yun Chee; Editing by Jan Harvey)
