One GRAIL share per six Illumina shares. That was the ratio on offer when Illumina finished handing its cancer-screening unit back to the market on 24 June 2024, ending a deal that regulators on two continents had never wanted in the first place.
The mechanics were tidy enough. At 12:01 a.m. Eastern on the distribution date, Illumina handed 85.5% of GRAIL’s outstanding shares to its own shareholders, with the record date set at 13 June. It kept the other 14.5%. GRAIL began trading on Nasdaq under the ticker GRAL on Tuesday 25 June, and Illumina carried on as ILMN.
A cheque to cut the cord
Money moved first. On 17 June Illumina signed a 364-day delayed-draw credit agreement to borrow up to $750 million on an unsecured senior basis, then drew the full amount on 20 June at roughly 6.70%. That cash, plus some from Illumina’s own balance sheet, went into GRAIL’s accounts so the new company would start life funded.
Jacob Thaysen, Illumina’s chief executive, framed it as a goal met. “We have achieved our goal of divesting GRAIL in a manner that allows its breakthrough technology to continue benefiting patients,” he said, adding that Illumina would keep supporting the business with its sequencing technology and services. He also used the occasion to look ahead: Illumina scheduled second-quarter results for 6 August and a two-hour virtual strategy update for 13 August.
How it got here
The route was long and expensive. Illumina spun GRAIL out in 2016 to raise capital for it, then announced in September 2020 that it would buy the business back for $7.1 billion. Illumina completed the purchase in August 2021 despite opposition from regulators in the United States and Europe.
The unwinding began on Sunday 17 December 2023, when Illumina said it would divest GRAIL. The trigger was a ruling two days earlier from the US Fifth Circuit, whose appeals judges found the merger anti-competitive. Illumina said it would either sell the unit or list it on capital markets, as the European Commission had ordered, and it aimed to settle the terms before the second quarter of 2024 was out. STAT’s Matthew Herper called it one of biotech’s most disastrous attempted mergers.
The deadline was met with days to spare.
Sources
- Illumina completes the divestiture of GRAIL
- Grail spinoff by Illumina should end disastrous merger attempt (STAT)
