Amazon terminates $1.4 billion iRobot acquisition after EU veto threat
Saturday, 03 February, 2024, 18:06
Amazon and iRobot, maker of the Roomba vacuum line, just announced that they would be dropping their proposed merger. The potential acquisition was announced back in August of 2022 and was immediately the target of antitrust watchdogs, particularly in the EU. The European Commission (the EU's executive branch) officially announced it was looking into the $1.4 billion dollar deal last July and it raised formal concerns over the potential impact on competition in November.
iRobot also just announced a large round of layoffs now that the deal isn't going through. The company says it is laying off about 350 employees, which represents 31 percent of iRobot's workforce. Colin Angle, founder, chairman of the iRobot board of directors and CEO is also stepping down as chairman and CEO, effective today.
Unsurprisingly, Amazon's statement on the matter blasts regulators for the "innovation" that would come with Amazon scooping up yet another company. "This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable," said Amazon SVP and General Counsel David Zapolsky in a statement. "Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren't subject to the same regulatory requirements in fast-moving technology segments like robotics."
iRobot's statement was more muted. "The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love," said former CEO Colin Angle.
Earlier in January, the European Commission was said to have warned Amazon that the deal was on thin ice. However, according to Reuters, the company declined to offer any potential remedies to soothe the bloc's concerns over the acquisition. As outlined in the original agreement, Amazon is paying iRobot a $94 million termination fee now that the deal is dead.
This isn't exactly the first time Amazon and the EU have butted heads. They previously squared off over the company's handling of third-party seller information. In 2022, the two sides reached an agreement over Amazon's treatment of third-party sellers.
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