On Monday, Amazon (NASDAQ:AMZN) officially withdrew its planned acquisition of iRobot, the robot vacuum manufacturer, citing antitrust scrutiny on both sides of the Atlantic as the primary reason. The ecommerce giant pointed to what it termed “undue and disproportionate regulatory hurdles.” In a joint statement, the companies expressed disappointment over the termination of their announced acquisition agreement.
Amazon had initially disclosed its intention to acquire iRobot in 2022 for $1.7 billion in cash. However, the deal’s value decreased by 15% as iRobot took on new debt. As part of the termination, Amazon will pay an undisclosed termination fee to iRobot. Simultaneously, iRobot announced a significant workforce reduction of approximately 31%, along with the departure of its CEO.
The European Commission, the EU’s executive arm and chief antitrust enforcer, had raised concerns about the anticompetitive nature of the acquisition. While British antitrust regulators cleared the purchase in June, the Federal Trade Commission in the US continued its scrutiny.
The European Commission, which had not responded immediately to requests for comment, had expressed worries that Amazon might diminish the visibility of competitors’ products or restrict access to certain labels, such as “Amazon’s choice,” potentially affecting consumer choices.
David Zapolsky, Amazon’s general counsel, criticized regulators and argued that consumers would miss out on “faster innovation and more competitive prices.” He contended that regulatory hurdles of this nature discourage entrepreneurs and hinder competition, contradicting the regulators’ purported aim of protecting consumers and fostering competition.
With the deal off the table, iRobot announced plans for a restructuring initiative aimed at stabilizing the company, involving the layoff of approximately 350 employees. Colin Angle, iRobot’s Chairman and CEO, will step down from his role, with Glen Weinstein, the company’s executive vice president and chief legal officer, serving as interim CEO during this transition.
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Author Stephanie Bédard-Châteauneuf 
