Amazon’s planned takeover of iRobot has been scrapped following opposition from EU competition authorities. The companies announced the decision in a joint statement, expressing their disappointment at the lack of a clear regulatory path for the purchase of the Roomba maker.
The deal, first announced in 2022, would have been one of Amazon’s largest ever acquisitions. The termination of the deal comes as a significant setback for iRobot, which has announced job cuts as a result. The robot vacuum maker has seen sales decline and is set to undergo a restructuring, including the axing of 350 jobs, which accounts for 31% of its staff. Additionally, the company will be reducing its office footprint and scaling back spending on research, with its chief executive also departing.
In the announcement, the companies stated that the decision to scrap the deal was mutual, and Amazon would pay the previously agreed $94 billion break-up fee. Amazon expressed its belief that regulatory decisions to block mergers in the name of increasing competition and protecting consumers from monopolies were counterproductive, denying consumers faster innovation and more competitive prices.
Shares in iRobot plummeted by more than 15% following the news, marking a decline of over 50% so far this year. Amazon’s pursuit of iRobot was aimed at expanding its range of smart-home appliance offerings, with the initial proposed acquisition price of $1.7 billion being reduced last year amid delays.
In the UK, the Competition and Markets Authority (CMA) had approved the deal last year, citing Roomba’s modest position in the UK market and the presence of significant rivals. However, European competition authorities expressed concerns that the tie-up would hinder competition in the vacuum-maker industry, particularly if Amazon were to provide the Roomba with advantages over rivals on its e-commerce platform. Additionally, the data collected by Roomba had raised questions, leading to a formal investigation by the European Commission, which indicated its readiness to block the deal.
The takeover also faced scrutiny in the US, where officials in the Biden administration have been taking a tougher stance on mergers, challenging the increasing concentration of corporate power.
