Amazon has officially abandoned its planned acquisition of vacuum manufacturer iRobot, citing insurmountable regulatory obstacles. The decision came after the European Union, reported by The Wall Street Journal, indicated that it would not grant regulatory approval for the deal.
Consequently, iRobot’s stock plummeted by 10% in Monday morning trading. In response to the collapsed acquisition, iRobot disclosed its intention to lay off 31% of its workforce, approximately 350 employees, and announced the immediate departure of its Chairman and CEO, Colin Angle.
The European Commission had initiated an investigation in July, expressing concerns that the acquisition could empower Amazon to impede competitors of iRobot on its online marketplace. David Zapolsky, Amazon’s Senior Vice President and General Counsel, expressed disappointment in a release, emphasizing that the deal could not proceed.
Simultaneously, iRobot detailed plans to focus on improving margins, decrease research and development spending, and temporarily halt work on non-floorcare products like air purifiers and robotic lawn mowers. Amazon will compensate iRobot with a $94 million breakup fee as stipulated in the prior agreement.
Initially valued at approximately $1.7 billion, iRobot’s market capitalization has now fallen below $400 million. The terminated deal, first disclosed in 2022, faced scrutiny from regulators worldwide, reflecting a broader trend of increased scrutiny of large technology companies.
The European Commission, Britain’s Competition and Markets Authority, and other regulatory bodies have delayed or halted various deals involving tech giants, underscoring concerns about anti-competitive behavior.