Illumina, the San Diego-based gene-sequencing equipment and services company, has recently submitted paperwork for the potential divestiture of its subsidiary, Grail. This move comes after the company was ordered by the European Commission to shed the acquisition it made.

In October, Illumina was directed to unwind its $7.1 billion purchase of Grail due to antitrust concerns raised by the European Commission. However, Illumina has contested the jurisdiction of the European Commission over the deal and stated that it would not divest Grail if its legal challenge to the order is successful.

To comply with regulatory requirements, Illumina has submitted a Form 10 draft registration statement to the Securities and Exchange Commission. The confidential submission of this form is deemed as an important next step for Illumina in assessing various options for divesting Grail, which specializes in developing cancer tests.

The company has been granted the ability to explore different possibilities for unwinding the acquisition process, such as pursuing a third-party sale or engaging in capital markets transactions. This significant development follows the agreement reached by Illumina to acquire Grail in 2020.

Earlier this year, Chief Executive Francis deSouza resigned from his position amidst regulatory challenges to the deal after losing support from several board members. Moreover, the acquisition sparked a proxy battle with activist investor Carl Icahn, who criticized the company for causing substantial financial losses to shareholders through its commitment to proceed with the acquisition.

In conclusion, Illumina's submission of paperwork for the potential divestiture of Grail represents a crucial step forward as the company evaluates its options in response to the European Commission's order.

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