Amazon has scrapped plans to acquire Roomba maker iRobot after the companies mutually determined that the pending deal “has no path to regulatory approval in the European Union.”
In a related announcement on Monday, iRobot said it would lay off approximately 350 employees, or 31% of its workforce, as part of its restructuring efforts. Colin Angle will step down as iRobot’s chairman and CEO, and Chief Legal Officer Glenn Weinstein will take his place on an interim basis.
The shock decision came after reports emerged earlier this month that the European Union’s antitrust watchdog, the European Commission, was planning to block the deal. Amazon had agreed to acquire iRobot for $1.7 billion in August 2022.
“We are disappointed that Amazon’s acquisition of iRobot could not proceed,” Amazon general counsel David Zapolsky said in a statement.
“The result will be that consumers reject faster innovation and more competitive prices, which we believe will make their lives easier and more enjoyable.” Zapolsky added.
Following the announcement, iRobot’s stock price plunged more than 17% in pre-market trading. Amazon stock was flat.
Amazon will pay iRobot a $94 million termination fee. As part of a company-wide shakeup, iRobot announced that it is “temporarily suspending all operations related to innovations other than floor care, including air purification, robotic lawn mowing, and education.”
“While we are disappointed to terminate our agreement with Amazon, iRobot is now focused on continuing to build thoughtful robots and intelligent home innovations that make lives better and are loved by customers around the world. ,” said iRobot’s Angle. In a statement.
The European Commission initially expressed concerns last fall that the Amazon-iRobot partnership could stifle competition and hinder the growth of other robot vacuum cleaner makers.
Regulators have raised the possibility that Amazon could restrict iRobot’s competitors from selling their products on online marketplaces.
