Amazon is abandoning plans to acquire Roomba maker iRobot, a $1.4 billion deal that would have been one of the company’s largest acquisitions ever.
In a statement Monday, the companies said “Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the European Union.”
EU regulators expressed concern about the deal in November, saying it “may restrict competition in the market for robot vacuum cleaners.” They said Amazon may prevent rivals from selling robot vacuum cleaners on its marketplace or limit access.
Politico reported this month that Amazon did not offer concessions to the European Commission, which had until Feb. 14 to approve or veto the deal. The acquisition was also under scrutiny by the U.S. Federal Trade Commission.
“Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” Amazon General Counsel David Zapolsky said in a statement. “Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition — the very things that regulators say they’re trying to protect.”
Amazon agreed to acquire iRobot in August 2022, part of a broader push by the Seattle-based tech giant to expand its footprint in consumer robotics. The company is working on its own home robot, Astro, and has an array of smart home technology products such as Ring cameras and Alexa-enabled devices.
Ken Washington, who oversaw the Amazon Astro home robot as the company’s vice president of consumer robotics, departed in May. Dave Limp, Amazon’s former devices chief, left a few months later.
The company’s Devices & Services division was among the Amazon groups hit by the company’s broader cutbacks starting in January 2023.
Amazon will pay iRobot a $94 million fee as a result of the termination.
The companies in July agreed to a 15% reduction in Amazon’s acquisition price to offset a new $200 million loan necessary to fund the Roomba robotic vacuum-cleaner maker’s ongoing operations. iRobot said it will use Amazon’s termination fee to help pay off the loan.
iRobot also said it plans to lay off 31% of the company, or about 350 employees. Colin Angle, iRobot chairman and CEO who helped start the company in 1990, has stepped down from both positions.
iRobot expects 2023 revenue to be down 25%, and a GAAP operating loss between $265 and $285 million. Its shares were down more than 10% on Monday.
