Is Illumina Still a Buy Without the GRAIL Acquisition?
Shareholders should certainly get a say when companies are making transformational changes. And it's obvious that all of the involved parties need to agree to move forward with acquisitions or mergers. But it's easy to forget that companies can only proceed with their plans to purchase one another or merge if they have the consent of regulatory authorities, too.
Much to management's chagrin, the giant of gene sequencing hardware, Illumina (NASDAQ: ILMN), recently got a sharp rebuke in the form of an administrative complaint and federal lawsuit from the Federal Trade Commission (FTC) regarding its intended acquisition of GRAIL, a cancer screening company. The FTC's lawsuit alleges that the deal "will diminish innovation in the U.S. market for multi-cancer early detection (MCED) tests." That's a bit odd, considering that in 2017, Illumina originally spun off GRAIL from itself without any prompting from regulators. Regardless, it will fight the FTC's challenge however it can, and the saga is far from over.
In the meantime, it's understandable why the problems with regulators might give potential investors pause. Is Illumina going to be in trouble if the acquisition falls through?
Source Fool.com
