Amazon and iRobot have announced they have mutually terminated their previously announced acquisition agreement, stating there was “no path” to regulatory approval.
Following this announcement, iRobot, the creator of the Roomba, has said it will lay off 31 per cent of its staff and its Founder and CEO, Colin Angle, will step down. The deal was valued at $1.7 billion (£1.3 billion).
Amazon originally moved to buy iRobot in August 2022. But ERT recently reported that the deal would be blocked by the European Union’s competition watchdog having previously been given the all clear by the UK’s CMA (Competition and Markets Authority).
Margrethe Vestager, the European Commission’s Executive Vice President, said in a statement: “Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores.”
She added that the merger would have restricted competition in the market for robot vacuum cleaners, leading to high prices, lower quality, and less innovation.
Amazon SVP and General Counsel, David Zapolsky, commented: “We’re disappointed that Amazon’s acquisition of iRobot could not proceed. We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products.
“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.
“Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition – the very things that regulators say they’re trying to protect.”
iRobot has said it will be cutting its research and development expense by approximately $20 million (£15.7 million) year-over-year and will be pausing all work related to non-floorcare innovations, including air purification, robotic lawn mowing and education.
