Life sciences specialist Illumina Inc. and gene-sequencing company Pacific Biosciences of California Inc. terminated their planned $1.2 billion merger agreement.
The decision was taken after the U.S. Federal Trade Commission and U.K. counterpart the Competition and Markets Authority blocked Illumina's proposed acquisition over concerns that the deal would allow Illumina to "unlawfully maintain its monopoly" in DNA sequencing.
The companies said the lengthy regulatory approval process of the deal has led to uncertainty of the outcome and the termination was in the best interest of their respective stakeholders and employees.
As part of the agreement, Illumina will pay Pacific Biosciences a termination fee of $98 million.
San Diego-based Illumina, the largest sequencing company in the industry, specializes in short-read sequencing while Pacific Biosciences has long-read sequencing technology. Short-read sequencing targets a part of the genome to read that specific position's sequence, while long-read sequencing reads full-length DNA.
In blocking the deal FTC noted that, upon combining, Illumina and Pacific Biosciences might not have an incentive to innovate if they are no longer competing with each other. The FTC's decision is subject to an administrative trial, which is scheduled for Aug. 18.
Illumina CEO Francis deSouza said the deal would have broadened access to Pacific Biosciences sequencing technology, significantly expanded and accelerated innovation, and ultimately increased the clinical utility and impact of sequencing.
"We are disappointed that our customers and other stakeholders will not realize the powerful advantages of integrating the sequencing capabilities of our two companies," said Pacific Biosciences CEO Michael Hunkapiller.