Amazon terminates $1.4 billion iRobot acquisition after EU veto threat

Amazon and iRobot, maker of the Roomba vacuum line, have announced that they will abandon their proposed merger. It was a potential purchase Announced in August 2022 and immediately became a target of antitrust watchdogs, especially the EU. The European Commission (executive body of the EU) released official information about this was looking the $1.4 billion contract last July and he raised formal concerns on the potential impact on competition in November.

iRobot also announced a major round of layoffs as the deal fell through. The company says it is laying off about 350 workers, or 31 percent of iRobot’s workforce. Colin Angle, founder, chairman and CEO of iRobot’s board of directors, is also stepping down as chairman and CEO effective today.

Although the companies did not specifically mention the pressure from the EU, Bloomberg notes there was a possibility of a veto. And while it didn’t kill the deal immediately, Amazon and iRobot decided to shut things down altogether rather than work on proposed changes to make the deal more palatable to regulators. It was reported that there would be an agreement Under the supervision of the FTC here in the US, but it never got the level of attention it got from the EU.

Unsurprisingly, Amazon’s announcement on the matter blasted regulators for the “innovation” that would come with Amazon’s takeover of another company. “This result will deprive consumers of the faster innovation and more competitive pricing that we believe would make their lives easier and more fun,” said Amazon SVP and General Counsel David Zapolsky. “Mergers and acquisitions like these help companies like iRobot better compete in the global marketplace, especially in fast-moving technology segments like robotics, against companies that aren’t subject to the same regulatory requirements.”

iRobot’s statement was more muted. “The cancellation of the deal with Amazon is disappointing, but iRobot is now looking to the future with a commitment and commitment to continue creating thoughtful robots and smart home innovations that make life better and that our customers around the world love,” said former CEO Colin Angle.

In early 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 means to assuage the bloc’s concerns about the purchase. As stated in the original agreement, Amazon is paying iRobot a $94 million termination fee as the deal ends.

This is not the first time between Amazon and the EU. They were mixed up before company management third party vendor information. Two sides in 2022 agreed On Amazon’s treatment of third-party sellers.

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