ALBAWABA – In a joint statement, Amazon and iRobot announced the termination of the deal announced in Aug. 2022, where Amazon was to take acquisition of Roomba maker iRobot for an estimated $1.7 billion, due to regulatory hurdles imposed by the EU.
While the European Commission (EC), the EU overseer on corporate competition, still legally has until Feb. 14 to make a final decision, Amazon and iRobot believe that the deal would not have went through, this is coming 10 days after Wall Street Journal reported that the EU is set to block the deal, which caused iRobot’s shares to take a 33 percent hit.
In the statement, both companies said that under this agreement, Amazon would have been able to help iRobot in cutting costs on goods that customers already like and invest in iRobot's ongoing innovation, calling the EU block a disappointment and “a loss for consumers, competition, and innovation”.
The news did not go lightly for iRobot, which saw a quick 15 percent fall in stock price, announcing right after they are separating ways with their CEO and co-founder Colin Angle, and laying off 350 employees, which make up about a third of the company’s workforce, with the company commenting that their revenue had fallen by 25 percent last year to $891 million.
David Zapolsky, senior vice president at Amazon, said regarding the news “This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable”, on the other hand, Margrethe Vestager, the EU’s competition commissioner, said regarding competition concerns over the deal “We also preliminarily found that Amazon would have had the incentive to foreclose iRobot’s rivals because it would have been economically profitable to do so”.
Both companies said that they reached a termination agreement between the two firms which addresses all outstanding issues related to the deal, with Amazon paying iRobot a termination fee that was originally agreed upon, estimated at $94 million.
