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Illumina announces spinoff plan, to start separating Grail shares on June 24.

TraderKnows
TraderKnows
06-04

After Illumina completed the acquisition of Grail, it has been facing antitrust investigations. Recently, they finally announced that they would proceed with a separation.

Illumina announced on Monday that its board of directors has approved the spin-off of Grail. This decision comes three years after the acquisition of Grail, a deal that has faced significant antitrust scrutiny and opposition from investor Carl Icahn.

According to the plan, shareholders will receive one share of Grail common stock for every six shares of Illumina stock they hold. Post spin-off, Illumina will retain a 14.5% stake in Grail. The spin-off is scheduled for June 24. Illumina's stock rose 4% in after-hours trading.

Illumina founded Grail in 2016 and subsequently spun it off, but reacquired Grail in 2021 for $7.1 billion, aiming to enter the early cancer detection market.

The deal faced opposition from antitrust regulators concerned that Illumina would prevent Grail's competitors from using its technology to develop competing blood-based early cancer detection products.

Last July, EU regulators fined Illumina a record €432 million (approximately $471.18 million) for completing the acquisition without antitrust approval.

Additionally, due to Grail's higher-than-expected expenditures and delayed progress in testing, Illumina was forced to make impairment charges. Icahn stated last December that these impairment charges amounted to $4.7 billion.

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stock split

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