Amazon scraps deal to buy Roomba maker amid regulatory scrutiny
Amazon said Monday it was abandoning plans to buy iRobot, maker of the self-driving Roomba vacuum, after regulators raised concerns the deal would harm competition.
Announcement The defeat is a rare admission of defeat by Amazon, which has acquired a diverse mix of companies like Whole Foods and MGM Studios in recent years, and is a sign of how the world's biggest tech companies are facing scrutiny over their business practices, Products are being forced to adjust. Policies resulting in tightening regulatory scrutiny globally, particularly in the EU.
In November, the EU antitrust regulator caution Amazon said that they may try to block the deal because it could limit competition in the market for robot vacuum cleaners. The Federal Trade Commission was also investigating the deal.
Amazon, which will pay iRobot a $94 million termination fee, said in a statement that it had to walk away from the deal, which was first announced, due in 2022 due to “disproportionate regulatory hurdles.” iRobot's products, which also include robotic mops and air purifiers, were to join the growing list of connected home products made by Amazon, including the Ring home security system and the Echo smart speaker.
Amazon said that rather than restricting competition, the deal would give iRobot more resources to compete with other robotics companies.
“This outcome will deprive consumers of the faster innovation and more competitive prices that we believe will make their lives easier and more enjoyable,” David Zapolsky, Amazon's senior vice president and general counsel, said in the statement.
Amazon is not the only company facing hurdles in completing an acquisition. In December, Adobe, maker of Photoshop and Illustrator, canceled its $20 billion acquisition of Figma, a maker of design collaboration tools, after being questioned by regulators in the United States, European Union and Britain.
In the EU, surveillance of the tech sector is expected to intensify in the coming months as a new law, the Digital Markets Act, aimed at increasing competition in the digital economy comes into full effect. Last week, Apple announced several changes to comply with the law, including allowing customers to use alternatives to the App Store for the first time.
IRobot, a publicly traded company struggling with falling sales and mounting losses, will have to reorganize without Amazon's financial support. The company's share price has fallen more than 60 percent in the past month as the fate of the deal with Amazon fell into doubt.
On Monday, iRobot Said It will cut about 350 jobs, or about 30 percent of its workforce, as well as reshuffle its management ranks.
Company founder Colin Engle, who is stepping down as chief executive, said, “The termination of the agreement with Amazon is disappointing, but iRobot now looks to the future with the focus and commitment to continue building thoughtful robots and intelligent home innovations.” Is increasing.” in a statement.
Glenn Weinstein, iRobot's executive vice president and chief legal officer, was appointed interim chief executive.