The UK Competition Authority raises worry about Illumina’s $1.2bn takeover of PacBio



The Competitions Market Authority (CMA) has raised concerns that the proposed merger between Illumina and Pacific BioSciences  will lead to a loss of innovation in the DNA sequencing market.

Illumina is one of the worlds leading companies working in genetics and they provide next generation DNA sequencing to a number of leading organizations all over the world. One such project is the 100,000 genome project, ran by Genomics England. This shows how important the work that Illumina provides is, as its DNA sequencing aides in projects that tackle to research genetic diseases producing innovative personalized solutions.

Illumina holds 80% of the global market share in DNA sequencing, with a 90% share in the UK alone. The CMA concludes that a merger between Illumina and PacBio will cause a loss of competition between the two companies, leading to a reduction in alternative DNA sequencing systems, which ultimately leads to less choice, higher prices and/or lower quality of products. Furthermore, because this market is extremely concentrated, the CMA is also worried that a deal between the two would also lead to a decrease of innovation in the market.

Further supporting the CMA’s case, is that in the investigation between the two companies, it was found that PacBio is one of Illumina’s closest competitors, with internal documents from the companies referring to each other as competitive threats.

Illumina had hoped to close the transaction in mid-2019, but the way things are progressing it seems like they have a long time to wait just yet.

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