Illumina's board of directors has approved a plan to spin off multicancer early detection test maker Grail by issuing shares to existing stockholders.
In a statement, Illumina said that Grail is expected to spin off from Illumina on June 24; the firm has applied to be listed on Nasdaq as GRAL.
Illumina shareholders will retain their current shares of Illumina common stock; on the distribution date, shareholders will also receive one share of Grail common stock for every six shares of Illumina common stock held at the close of business on June 13. Illumina will retain 14.5% of the outstanding shares of Grail common stock. Fractional shares of Grail common stock will be aggregated and sold in the open market, with the net proceeds distributed in cash payments to Illumina shareholders.
The distribution is expected to occur at 12:01 a.m. Eastern Standard Time on June 24, subject to customary conditions.
The divestiture of Grail is a significant breakthrough for Illumina, which has faced conflict since acquiring the firm in 2021 for $8 billion without receiving approval from European Union antitrust regulators. Not only did the acquisition result in a fine of 432 million euros ($457 million) and an order to divest from the European Commission, it also resulted in an order to divest from the U.S. Federal Trade Commission and sparked an investigation by the U.S. Security and Exchange Commission.
Additionally, Illumina descended into a proxy war involving activist investor Carl Icahn that resulted in the ousting of board chairman John Thompson and the departure of former CEO and board director Francis deSouza.
"Today's announcement marks a milestone for Illumina and signals an important step forward for the company, since the divestiture of Grail is one of our 2024 priorities," Jacob Thaysen, CEO of Illumina, said in a statement.
"As we prepare to lead the next era of genomics innovation, we believe Grail will play an important role in advancing the industry and improving human health. We will maintain a minority share of 14.5% in Grail and remain excited about Grail's breakthroughs in the fight against cancer. We also look forward to exploring opportunities where we can support Grail's work with industry-leading technologies and solutions," Thaysen said.
