I say Ugh! because I'm not a fan of Roche's effort in this space. They bought 454 and the platform has largely stagnated, never escaping the high run cost and high cost per base relative to rivals. Some improvements in read length have occurred, though I get the feeling from various sources that the vaunted 1Kb reads are not a routine occurrence. They bought Nimblegen and have stayed a decent player in the array and capture space, but nothing exciting there. Roche has focused on clinical applications of 454 in particular, which perhaps was a logical strategy: once they decided they wouldn't (or couldn't) make major performance improvements in 454, an appropriate choice would be to try to gain an early foothold in the clinic, knowing that change is slow here and early adoption might yield staying power.
The other part of my Ugh, and perhaps more emphatic, is that this is a huge distraction for Illumina's management. Worse, if they are taken out then there will be a huge distraction for the entire workforce as the two companies are integrated. Illumina has been leading in the sequencing arena, but faces energetic competition from Life with the Ion platform. Indeed, as projections stand now Illumina could be on the losing side of this race by year's end. Now, it may be that Illumina has some slick tricks up their sleeve -- they've hinted at single molecule technology and there is their investment in Oxford Nanopore, but with fighting a takeover battle (or dealing with the aftermath), those won't get critical attention.
Illumina is, as it is said, now "in play". Roche may up their bid, or a "white knight" may step in. There are plenty of large instrument or medical companies (Siemens & GE have been mentioned). On the other hand, some of the companies that sprung to my mind are just too small, such as Affymetrix and Perkin Elmer, to get into this fray.
Some commentary has speculated that a Roche-Illumina merger could be held up by antitrust concerns over market concentration. I don't doubt that might happen, but it would reflect on a poor understanding of the sequencing market. Roche has a declining share of the market and it would hardly be shifting Illumina's position to thrown in 454. Plus, there are plenty of startups waiting in the wings with new technologies that might tip the competitive balance, something which analysts looking at Illumina have sometimes cited in the past.
I've wondered periodically if sequencing companies would stay independent, but Illumina wasn't one I had considered a target. But the steep fall of sequencing company stocks has made them tempting apparently. Will others follow? It has been widely reported that Complete Genomics and Pacific Biosciences are selling at or near their cash balances. There's also the battered remnant of Helicos. And, of course, all those little startups. I had always expected takeovers to be mostly companies lacking sequencing technology acquiring a foothold, but of course this is the second big deal to follow the pattern of established players buying another player (the other being Life taking out Ion Torrent).
Should Roche succeed, the one bright spot (a tiny one!) is that Roche has extensive experience getting diagnostics into the clinic, so this might speed the introduction of DNA sequencing to routine medical care. A small gain for a lot of organizational distraction at Illumina that can't be any good for those riding the sequencing roller coaster in the research field.