Published on Dec 17, 2019
FTC commissioners today plan to vote on whether to sue to block Illumina’s (ILMN) proposed $1.2 billion acquisition of Pacific Biosciences (PACB), a source familiar with the matter said.
The companies’ representatives met last week with individual commissioners to make their case but weren’t told when a vote would occur, a separate source said.
The vote is scheduled despite Illumina’s proposal—spurred by UK antitrust enforcers’ concerns—to license intellectual property to rival gene-sequencing instrument providers. The UK’s Competition and Markets Authority, which put off its decision until February to consider the proposal, is now vetting it with third parties, sources said.
Some third parties who complained in the U.S. about the merger shortly after the companies unveiled it in November 2018 don’t think the proposed fix would mitigate the transaction’s competitive harm, separate sources said.
An FTC spokesperson declined to comment. Spokespeople for Illumina and PacBio didn’t immediately respond to requests for comment.
Suit prepared. Before Illumina proposed the remedy late last month, the FTC was preparing to file suit in administrative court, where it almost always wins, driven by the agency staff’s rejection of the companies’ argument that their short-read and long-read instruments don’t compete.
If the FTC sues but CMA accepts the remedy, the U.S. agency would be forced to go to district court to obtain an injunction preventing the deal from closing. A similar scenario unfolded when the FTC in 2017 challenged the proposed Tronox/Cristal tie-up in administrative court but sued in federal court when the European Commission ultimately approved the deal last year.
If both the FTC and CMA take action to block the Illumina/PacBio transaction, the companies’ options for keeping the deal alive would be limited. They could appeal the decision to the UK’s Competition Appeal Tribunal, which historically has favored CMA prohibitions, while fighting the U.S. litigation in hopes of a positive ruling.