Amazon and iRobot, manufacturer of the Roomba vacuum cleaner range, have just announced that they will abandon their merger plan. The potential acquisition was announced in August 2022 and was immediately the target of antitrust watchdogs, particularly within the EU. The European Commission (executive branch of the EU) officially announced he was looking for THE $1.4 billion deal last July and that raised formal concerns on the potential impact on competition in November.
iRobot also just announced a major round of layoffs now that the deal hasn't closed. The company says it is laying off about 350 employees, representing 31 percent of iRobot's workforce. Colin Angle, Founder, Chairman and CEO of iRobot, is also stepping down as Chairman and CEO, effective immediately.
Unsurprisingly, Amazon's statement on the matter criticizes regulators for the “innovation” that would come with Amazon acquiring a new company. “This outcome will deprive consumers of faster innovation and more competitive pricing, which we believe would have made their lives easier and more enjoyable,” said David Zapolsky, vice president and general counsel of Amazon, in a press release. “Mergers and acquisitions like this help companies like iRobot be more competitive in the global marketplace, especially against companies and countries that are not subject to the same regulatory requirements in rapidly evolving technology segments like robotics .”
iRobot's statement was more muted. “The termination of the deal with Amazon is disappointing, but iRobot now looks to the future with the drive and commitment to continue building thoughtful robots and smart home innovations that make life better and our customers around the world love it,” said the former CEO. Colin Angle.
Although the companies did not specifically mention pressure from the EU, Bloomberg Remarks that a veto seemed likely. And while it may not have immediately killed the deal, Amazon and iRobot appear to have decided to shut the doors entirely rather than work on proposed changes to make the deal more palatable to regulators.
Earlier in January, the European Commission reportedly warned Amazon that the deal was on ice. However, according to Reuters, the company declined to offer potential solutions to allay the bloc's concerns about the acquisition. As outlined in the original agreement, Amazon is paying iRobot a $94 million termination fee now that the deal is over.
This isn't exactly the first time Amazon and the EU have clashed. They previously clashed over business management information about third-party sellers. In 2022, both camps reached an agreement about Amazon's treatment of third-party sellers.
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