LONDONAmazon canceled its proposed acquisition of vacuum cleaner maker iRobot on Monday as the deal faced antitrust scrutiny from both sides of the Atlantic Ocean, with the e-commerce giant saying it was due to “undue and disproportionate regulatory hurdles.”
The companies reported in a joint statement that they “reached a mutual agreement to terminate the announced acquisition agreement” and expressed their disappointment.
The deal faced antitrust scrutiny, most intensely in Europe, where regulators investigating competition concerns were expected to issue a final decision by Feb. 14.
Amazon announced in 2022 that it was buying iRobot, maker of the Roomba circular vacuum cleaner, for $1.7 billion in cash. But the value of the deal fell 15% after iRobot incurred new debt.
Amazon will pay the Bedford, Massachusetts-based company a previously agreed-upon termination payment of $94 million. For its part, iRobot announced that it will lay off about 31% of its staff and that its CEO will leave the company.
The European Commission, the executive arm of the European Union and the ultimate enforcer of antitrust law, informed Amazon last year of its “preliminary opinion” that the acquisition of the robot vacuum maker would affect competition in the industry.
Although British antitrust regulators cleared the purchase in June, the U.S. Federal Trade Commission was still examining the deal.
The European Commission did not immediately respond to a request for comment. He was concerned that Amazon could reduce the visibility of a competitor’s products or limit access to certain labels, such as “Amazon’s choice,” that can attract more shoppers.
The commission said last year that Amazon may also have found ways to raise costs for iRobot’s rivals to advertise and sell their products on its platform.
Amazon CEO David Zapolsky lashed out at regulators and said consumers will lose out on “faster innovation and more competitive pricing.”
“Mergers and acquisitions like this help companies like iRobot better compete in the global market, especially against companies, and countries, that are not subject to the same regulatory requirements in rapidly evolving technology segments like robotics,” he said.
Source: With information from AP
