Illumina, Inc. (NasdaqGS:ILMN) entered into a non-binding term sheet to acquire remaining 85.5% stake in GRAIL, Inc. for $8 billion on September 9, 2020. Illumina, Inc. (NasdaqGS:ILMN) entered into an agreement to acquire remaining 85.5% stake in GRAIL, Inc. on September 20, 2020. GRAIL stockholders will receive total consideration of $8 billion, consisting of $3.5 billion in cash and $4.5 billion in shares of Illumina common stock, subject to a collar. Upon closing of the transaction, current Illumina stockholders are expected to own approximately 93% of the combined company, while GRAIL stockholders are expected to own approximately 7% based on the mid-point of the collar. In connection with the transaction, GRAIL stockholders will also receive contingent value rights, which will entitle holders to receive future payments representing a pro rata portion of certain GRAIL-related revenues each year for a 12-year period. This will reflect a 2.5% payment right to the first $1 billion of revenue each year for 12 years. Revenue above $1 billion each year would be subject to a 9% contingent payment right during this same period. Illumina will offer GRAIL stockholders the option to receive additional cash and/or stock consideration, in an amount to be determined prior to closing, in lieu of the contingent value rights. The cash consideration of approximately $3.1 billion is expected to be funded using balance sheet cash of both Illumina and GRAIL plus up to $1 billion in capital raised through either a debt or equity issuance. In advance of this anticipated issuance, Illumina has obtained financing commitments for a $1 billion bridge facility with Goldman Sachs Bank USA. On March 23, 2021, we terminated the bridge facility commitment letter in conjunction with the issuance of the 2023 and 2031 Term Notes. Following the completion of the transaction, GRAIL will operate as a standalone division within Illumina. In the event that the Merger Agreement is terminated, Illumina will receive shares of non-voting Grail preferred stock in respect of all Continuation Payments in excess of $315 million and Illumina will pay $300 million to GRAIL.

The completion of the Mergers is subject to satisfaction or waiver of specified closing conditions, including the receipt of required approvals from Grail stockholders, the receipt of required regulatory approvals, including the expiration or termination of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Act, as amended, the effectiveness of the Registration Statement to be filed by Illumina, the authorization for listing on NASDAQ of the shares of Illumina Common Stock to be issued in connection with the merger and as a condition to the Illumina's obligation to consummate the merger, the Selling Investors' execution and delivery of the Selling Investor Support Agreement and the Drag-Along Consent. The transaction has obtained approval from board of directors of Illumina. The transaction is unanimously approved by board of directors of GRAIL. On November 9, 2020, Illumina and GRAIL received requests for additional information and documentary materials from the U.S. Federal Trade Commission (“FTC”) in connection with the acquisition, issued under notification requirements of the HSR Act. The requests extend the waiting period under the HSR Act until 30 days after Illumina and GRAIL have each substantially complied with the second request, unless that waiting period is extended voluntarily by the parties or the waiting period is otherwise terminated by the FTC. FTC has filed an administrative complaint that alleges the proposed acquisition will diminish innovation in the U.S. market for MCED test. As of March 30, 2021, Illumina disagrees with, and will oppose, the Federal Trade Commission challenge to its acquisition of GRAIL. Illumina will pursue its right to proceed with the transaction. As of April 16, 2021, the US Federal Trade Commission (FTC) has filed an administrative complaint and authorized a federal court to block the acquisition, claiming the deal will harm competition in the US market for early-stage cancer diagnostics. The European Commission will review the transaction by July 27, 2021. As of July 22, 2021, European Commission will review the transaction by November 29, 2021. As of January 21, 2021, European Commission will review the transaction by March 4, 2022. Illumina is challenging both the FTC and European Commission. The transaction is expected to close in the second half of 2021. As of April 27, 2021, the transaction is expected to close in the second quarter of 2021. The transaction will expire by September 20, 2021, if it isn't extended. The deal has an initial expiration date of September 20, 2021 but that can be automatically extended to December 20, 2021. The transaction is expected to be accretive to Illumina revenue starting in 2021, and to meaningfully accelerate revenue growth over time. As of May 27, 2021, The FTC is asking a judge to dismiss its injunction motion without preventing the agency from filing another such motion in the future.

Clint Gartin and Ari Terry of Morgan Stanley & Co. LLC acted as financial advisors and fairness opinion providers and W. Alex Voxman, David A. Zaheer, Brian Duff, Cheston Larson, Brian Cuneo, Christopher Geissinger, Lisa Watts, Larry Seymour, Julie Crisp, Michael Egge, Patrick English, Christopher Hazuka, Andrew Clark and Elizabeth Richards of Latham & Watkins LLP acted as legal advisors to GRAIL. Ting S. Chen, Faiza J. Saeed, David J. Kappos, Anthony N. Magistrale, Christine A. Varney, Eric W. Hilfers, Stephen L. Gordon, Matthew Morreale, Brian M. Budnick and Laurel R. Berkowitz of Cravath, Swaine & Moore LLP acted as legal advisors and Charles Chuck Adams, Bartosz Ostenda and Neha Krishnamohan of Goldman Sachs & Co. LLC acted as financial advisors to Illumina. GRAIL has agreed to pay Morgan Stanley a fee of $51.5 million. As compensation for Morgan Stanley rendering a financial opinion to the GRAIL Board with respect to the Base Consideration to be received in the Transaction, GRAIL also has agreed to pay Morgan Stanley a fee of $3 million.

Illumina, Inc. (NasdaqGS:ILMN) completed the acquisition of remaining 85.5% stake in GRAIL, Inc. on August 18, 2021. As a result of Illumina's failure to obtain EU approval before closing the Acquisition, the EU Commission opened a new investigation to determine whether Illumina breached the “standstill obligation” under Article 7 of the Merger Regulation. As of January 28, 2022, The EU competition watchdog extended its deadline for a decision to March 25, 2022. As of July 13, 2022, The General Court upholds the decisions of the Commission accepting a referral request from France, as joined by other Member States, asking it to assess the proposed acquisition of Grail by Illumina. The EU competition watchdog extended its deadline for a decision to September 12, 2022.