Amazon gives up on iRobot, which collapses on Wall Street
The 1.7 billion deal falls through after the EU turned the spotlight on it, bringing competition into play
2' min read
2' min read
In the past few days there were initial doubts. Now, however, the news is official: the agreement reached in the summer of 2022 has collapsed, and Amazon has announced that it is abandoning its acquisition of iRobot, the company that manufactures the Roomba domestic cleaning robot.
In a statement, the two American companies announced that 'there is no chance of approval by the authorities' of the agreement signed about a year and a half ago. Hence the decision to take a step back. A step backwards that cost a lot, in terms of stock market value, to iRobot, which in fact immediately announced that it wanted to cut 31% of its workforce (around 350 people) and that its president and CEO, Colin Angle, was leaving the company with immediate effect.
Measures that have not stopped the haemorrhaging of the Bedford (Massachusetts) company's stock, which immediately lost 15% at the opening. A collapse that - added to those that had already occurred in recent days after the first rumours of a pending negotiation - became over 63%, taking iRobot's shares from 37 to 14 dollars. Less than three weeks ago, Amazon had missed the deadline to offer answers to the European Union, which had conducted an investigation, on the danger of harm to competition in the robot hoover market. Amazon's share price gained 0.4 per cent in premarket trading.
As we said, the agreement between Amazon and iRobot is from August 2022. The two companies signed a $1.7 billion deal. And the eCommerce giant's idea was clear: to enrich its portfolio of smart devices, which includes the voice assistant Alexa, thermostats, security devices and displays.
A year and a half later, however, regulators turned the spotlight on this deal, raising important questions: the potential for this takeover of smaller rivals to lead to a few companies gaining access to large amounts of customer data and controlling the market. The investigation eventually convinced Amazon to let go of its hold on the Roomba company, resulting in what is - in fact - the second regulatory block to tech transactions within a few weeks. A European 'victory' of sorts.
