Shares of Pacific Biosciences of California Inc. ( (PACB) - Get Report ) were lower after the U.K. antitrust authority expressed concern that the company's plan to be acquired by Illumina Inc. ( (ILMN) - Get Report ) could hurt competition.

In early November the companies said Illumina, the San Diego provider of DNA-sequencing technologies for research and clinical use, agreed to pay $8 a share for its Menlo Park, California, rival. The deal's enterprise value is $1.2 billion. 

Early in Wall Street trading, Pacific Biosciences shares fell 3% to $6.48. Illumina was up 0.6% at $353.21.

The U.K. Competition and Markets Authority said on Tuesday that an initial inquiry into the deal showed it could remove what might be the most significant competitive threat to Illumina.

Pacific Biosciences "recently released a new, innovative system for DNA sequencing ... which means that it is well-positioned to offer stronger competition to Illumina," the agency said in a statement

The authority gave the companies until next week to respond to its questions about the deal, Reuters reported. 

If they can't allay the agency's concerns, a panel of its members will do an in-depth Phase 2 inquiry, the agency said.

DNA sequencing systems are used to study genetic variation in humans and other species for disease research and drug development, the agency said.