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Key Takeaways
- Amazon said it no longer plans to acquire iRobot amid regulatory hurdles, sending shares of the Roomba maker tumbling.
- iRobot said it would lay off 350 employees or about 31% of its workforce and that CEO Colin Angle would step down.
- The deal fell through amid reports that the European Commission would block the acquisition.
- Amazon SVP and General Counsel David Zapolsky said the acquisition faced “undue and disproportionate regulatory hurdles.”
Amazon (AMZN) said it no longer plans to acquire iRobot (IRBT), sending shares of the Roomba maker tumbling over 6% in intraday trading Monday.
iRobot also announced a restructuring plan to lay off 350 workers or about 31% of the company’s workforce, and that Chief Executive Officer (CEO) Colin Angle would step down as CEO.
The deal fell through after reports earlier this month cast doubt on its future amid regulatory scrutiny after the European Commission reportedly told Amazon that the acquisition was likely to be blocked.
“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable,” Amazon SVP and General Counsel David Zapolsky said in a release, adding that “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 said in 2022 it would acquire the Roomba maker in a $1.7 billion deal. Later, Amazon lowered its purchase price to $1.4 billion after iRobot took on additional debt.
iRobot shares were down 6.5% at $15.88 per share as of about 12:15 p.m. ET Monday following the news, while Amazon shares were 0.6% higher at $160.10.