By Foo Yun Chee
BRUSSELS (Reuters) -EU antitrust regulators on Monday proposed measures for U.S. life sciences company Illumina to unwind its acquisition of biotech firm Grail, three months after blocking the deal on concerns that it would hurt competition.
Illumina completed the takeover of Grail in August 2021, without securing European Union regulatory approval.
The European Commission said in a September veto decision that the company failed to offer adequate remedies to allay its worries and opened a separate case to force Illumina to unravel the deal.
The EU competition enforcer said on Monday that it had sent a statement of objections to Illumina and Grail setting out proposed measures they would have to take to restore competition in the market.
The companies can ask for a closed-door hearing and also submit a written response before the EU antitrust watchdog issues a final decision in early 2023.
"The dissolution of the transaction must restore Grail's independence from Illumina, to the same level that Grail had prior to the completion of the transaction," it said on Monday.
"Grail must be as viable and competitive after the divestment as it was before Illumina's acquisition, to ensure that the innovation race between Grail and its rivals can continue as before," it added.
Illumina said the EU proposal was out of proportion and that any divestment should wait for the outcomes of two lawsuits launched by the company against the Commission.
"We believe divestment is not proportional to the speculative harm alleged by the Commission," Illumina said in a statement on Monday.
"Any divestment order should be stayed until our appeal of the Commission's prohibition decision has been resolved by the European courts" as well a second legal challenge against the watchdog's power to examine the deal, Illumina said.
The Commission said the divestment must be swift. The measures set out in the statement of objections will replace interim measures adopted in October.
(Reporting by Foo Yun Chee; Editing by Alexander Smith)