Amazon.com Inc. is not going to acquire iRobot, the businesses jointly announced Jan. 29. The proposed acquisition has “no path to regulatory approval within the European Union,” in keeping with the statement.
The retailer can pay iRobot a termination fee of $94 million.
Amazon ranks No. 1 within the Digital Commerce 360 Top 1000. The Top 1000 is a rating of North America’s leading retailers by online sales. iRobot Corp. ranks No. 396.
Amazon also ranks No. 3 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by third-party gross merchandise volume (GMV). Digital Commerce 360’s 2023 Global Online Marketplaces Report includes key insights into the most important players within the database.
Terms of the deal
Amazon previously agreed to amass iRobot in August 2022 for $1.65 billion. The deal would have brought iRobot’s Roomba vacuum under Amazon’s umbrella, alongside Amazon’s devices including the Echo, Ring and Kindle.
Had the deal passed through, it also would have been Amazon’s fourth-largest acquisition so far, The Wall Street Journal reported.
“We’re dissatisfied that Amazon’s acquisition of iRobot couldn’t proceed,” Amazon senior vp and general counsel David Zapolsky said in a press release. “We’re believers in the longer term of consumer robotics in the house and have at all times been fans of iRobot’s products, which delight consumers and solve problems in ways in which improve their lives. Amazon and iRobot were excited to see what our teams could construct together, and we’re deeply grateful to everyone who worked tirelessly to attempt to make this collaboration a reality.”
Regulatory roadblocks
The European Commission opened an investigation into Amazon’s proposed acquisition of iRobot in July 2023. In November, the body released its findings that if the deal went through, Amazon might restrict competition for robot vacuum cleaners.
“Amazon could have the power and the inducement to foreclose iRobot’s rivals by engaging in several foreclosing strategies aimed toward stopping rivals from selling RVCs (robot vacuum cleaners) on Amazon’s online marketplace and/or at degrading their access to it,” the European Commission wrote. It noted that Amazon’s marketplace was a very vital channel for consumers to seek out and buy robot vacuum cleaners in France, Germany, Italy and Spain.
The Federal Trade Commission (FTC) also planned to sue to dam the acquisition, the WSJ reported.
Amazon criticized regulators’ decisions.
“This consequence will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help firms like iRobot higher compete in the worldwide marketplace, particularly against firms, and from countries, that aren’t subject to the identical regulatory requirements in fast-moving technology segments like robotics,” Zapolsky said. “Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should give you the option to see acquisition as one path to success, and that hurts each consumers and competition — the very things that regulators say they’re attempting to protect.”
What’s next for iRobot?
Following the announcement, iRobot plans to cut 350 jobs by the tip of March. That amounts to 31% of the corporate’s workforce as a part of a restructuring plan.
CEO and Chairman Colin Angle also stepped down from each roles, effective immediately. He was replaced by executive vp and chief legal officer Glen Weinstein as interim CEO.
“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the longer term with a spotlight and commitment to proceed constructing thoughtful robots and intelligent home innovations that make life higher, and that our customers all over the world love,” Angle said.
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