Illumina, Inc. (NASDAQ: ILMN) announced on Thursday that the Company has mutually agreed with Pacific Biosciences of California (NASDAQ: PACB) to terminate their USD 1.2 Billion merger agreement.

Illumina shares fell narrowly by 0.69% on Friday morning, while Pacific Biosciences rose by 1.8%.

Both parties agreed that due to the lengthy regulatory approval process the transaction has already been subject to and continued uncertainty of the ultimate outcome.

Illumina and Pacific Biosciences agreed that the terminating agreement is in the best interest of their respective shareholders and employees.

“We believe this proposed combination would have broadened access to Pacific Biosciences sequencing technology, significantly expanded and accelerated innovation, and ultimately increased the clinical utility and impact of sequencing,” said Francis deSouza, President and Chief Executive Officer of Illumina. “I’d like to thank our employees, as well as the Pacific Biosciences team, for their unwavering dedication and commitment throughout this process. Moving forward, we will continue to look for ways to increase the impact and benefit of sequencing technologies for researchers, clinicians, and most importantly, patients.”

The merger between the two companies raised concerns from antitrust authorities in the U.S. and the U.K.

In a complaint last month, the U.S. Federal Trade Commission accused Illumina of acquiring Pacific Biosciences to prevent it from developing into a competitor in the market for next-generation DNA 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 Michael Hunkapiller, Ph.D., Chief Executive Officer of Pacific Biosciences. “With that said, we are confident in the future of Pacific Biosciences as we continue to pursue improved sequencing accuracy and throughput that can be utilized in an ever-expanding number of applications.”

In accordance with the merger agreement, Illumina will pay Pacific Biosciences a termination fee of USD 98 Million.