Amazon is terminating its planned $1.4 billion acquisition of vacuum maker iRobot, which was facing scrutiny from U.S. and European antitrust regulators.
Amazon and iRobot agreed Monday to terminate the planned $1.4 billion acquisition of the vacuum maker after facing hurdles from European antitrust regulators.
The companies said the deal had "had no path" to approval in the European Union.
"This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable," said David Zapolsky, Amazon senior vice president and general counsel.
Zapolsky also said the "undue and disproportionate regulatory hurdles" only hurts consumers and competition, "the very things that regulators say they're trying to protect."
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The same day the deal was terminated, iRobot, the company behind the Roomba vacuum, also announced it was cutting 31% of the company's workforce. IRobot said those cuts are part of an operational restructuring plan that's designed to stabilize the company in the current environment.
Under the proposed deal, announced in August 2022, Amazon would have acquired iRobot for a revised $51.75 per share, bolstering its position in the smart home market. It originally agreed to $61 per share in an all-cash transaction valued at approximately $1.7 billion, including iRobot's net debt.
The companies had argued that the deal would have allowed Amazon to "invest in continued innovation by iRobot" and would have lowered prices for consumers.
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It was a hard sell for regulators both in the U.S. and the EU.
The Competition and Markets Authority, British antitrust regulators, had cleared Amazon’s purchase of the robot vacuum after looking into whether the deal would result in a "substantial lessening of competition" within the United Kingdom.
However, last summer, the European Commission announced it had opened an in-depth investigation to assess the deal, saying it's "concerned that the transaction would allow Amazon to restrict competition in the market for robot vacuum cleaners and to strengthen its position as online marketplace provider."
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The acquisition was also under review by the Federal Trade Commission, which was also worried about Amazon’s growing market power.
