A legal opinion on the other side of Planet Earth put some juice into Illumina's (ILMN 1.02%) stock on Thursday. The gene-sequencing specialist saw its share price rise by over 3%, against the S&P 500 index's 0.3% bump, on strong indication that a regulator's move against the company might soon be reversed.
A top court advisor criticizes a ruling in Europe
That day, a senior advisor to the European Commission (EC) -- the European Union's (EU) executive arm that also holds certain regulatory powers -- criticized the Commission's ruling on an Illumina acquisition. Specifically, this was the company's $8 billion cash-and-stock deal to purchase cancer detection company Grail, agreed in 2020.
In 2021, the EC blocked the deal following requests from a clutch of EU countries. This, despite the fact that the purchase was under the revenue threshold according to EU regulations. The Commission cited a rarely used power known as Article 22 as the basis for its decision.
However, on Thursday Nicholas Emiliou, advocate general for the Court of Justice of the European Union, said the EC had not applied Article 22 properly. Because of this, all decisions using that as a foundation should be annulled -- including the Illumina purchase of Grail.
A potential reversal of an "improper" decision
The advocate general's opinion carries a great deal of weight in regulatory and judicial matters in the EU, however it's important to note that it is only advisory. The EC has the power to make the final decision.
Not surprisingly, Illumina greeted Emiliou's move warmly. In an email, the company wrote that it "agrees with the Advocate General that the European Commission's assertion of jurisdiction over this merger was improper."
