Amazon Abandons $1.4bn iRobot Buy Amidst EU Opposition
Amazon calls off deal to buy iRobot for $1.4bn after EU raises concerns over competition in market for home devices
Amazon and Roomba vacuum cleaner iRobot have abandoned their $1.4 billion (£1.1bn) merger bid in the face of opposition from EU regulators, who had highlighted the risks to emerging competition in EU markets such as France, Germany, Italy, and Spain.
The move follows Adobe’s similar abandonment of its bid to acquire cloud software maker Figma after facing EU and UK regulatory opposition, and a broader environment of increased scepticism toward acquisitions by the world’s dominant tech companies.
Amazon, which chose not to offer remedies for the EU’s concerns, now must pay a $94m termination fee to iRobot.
The companies announced the deal in August 2022 and while they negotiated regulatory approvals had already been forced to renegotiate the arrangement last year, with Amazon cutting its per-share offer by about 15 percent.
Competition concerns
The European Commission earlier said it was concerned Amazon could promote its own vacuum cleaners over those of competitors and could find it “economically profitable” to shut out rivals.
Amazon already makes home devices such as Alexa and Ring doorbells, the latter acquired in a $1bn deal in 2018.
The EU had also highlighted possible privacy issues with giving Amazon expanded data from users’ homes.
Amazon last week halted a controversial programme under which it shared Ring camera footage with police and last year agreed in a settlement with the US Federal Trade Commission to pay $30m over previous privacy violations related to Alexa and Ring.
‘Disappointed’
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said Amazon general counsel David Zapolsky. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products.”
The UK’s Competition and Markets Authority had approved the deal in June.
iRobot has seen about $500m in net losses since the second quarter of 2021 amidst a post-pandemic decline in sales and announced it would cut about 31 percent of its workforce in a cost-cutting drive.
