AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

LONDON — Amazon cancelled its acquisition of robot vacuum firm iRobot on Monday, citing “undue and disproportionate regulatory hurdles” after the European Union opposed the transaction.

The firms announced in a joint statement that they were disappointed but agreed to end the acquisition. The merger drew antitrust attention on both sides of the Atlantic, especially in Europe, where authorities investigating competition issues were scheduled to make a final decision by February 14.

Amazon said that in 2022, it would buy iRobot, the producer of the circular-shaped Roomba vacuum, for $1.7 billion cash. However, the deal’s value decreased by 15% after iRobot took on extra debt.

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon will pay the Bedford, Massachusetts-based business a previously agreed-upon termination fee of $94 million, iRobot said in a separate release, which also revealed that it would lay off around 31% of its workforce and fire its CEO.

The European Commission, the European Union’s executive arm and top antitrust watchdog warned Amazon last year of its “preliminary view” that the iRobot acquisition would reduce industry competition.

While British antitrust regulators cleared the deal in June, the Federal Trade Commission in the United States continued investigating.

The European Commission waited to respond to a request for comment. It was concerned that Amazon would minimise the exposure of an iRobot competitor’s product or restrict access to certain labels, such as “Amazon’s Choice,” which could draw more customers.

Last year, the commission said that Amazon may have discovered ways to boost the expenses for iRobot’s competitors to advertise and sell their products on its platform.

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon’s chief counsel, David Zapolsky, slammed authorities, saying consumers would miss out on “faster innovation and more competitive prices.”

“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,” he added.

He also pointed out that “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.”

Now that the purchase has been called off, iRobot has announced a restructuring strategy to stabilise the company. The corporation plans to lay off approximately 350 people as part of these reforms.

Colin Angle, iRobot’s chairman and CEO, will also step down. Glen Weinstein, the company’s executive vice president and chief legal officer, will become interim CEO.

Consumer rights groups had expressed worries about the Amazon-iRobot merger, claiming it would increase the ecommerce giant’s domination in the smart home industry.

AMAZON: Bid To Buy Roomba Maker IRobot Is Called Off Amid Pushback In Europe

Amazon has previously acquired several smart home firms, including Blink, Ring, and Eero, a mesh-networking Wi-Fi company.

This is the latest example of a partnership between US corporations that failed after being scrutinised by European regulators.

Adobe abandoned its $20 billion acquisition of online design business Figma last year due to antitrust concerns raised by the EU and the UK. After losing legal battles with antitrust officials in Europe and the United States, biotech giant Illumina was forced to cancel its $7.1 billion acquisition of cancer-screening business Grail.

SOURCE – (AP)