Amazon, $AMZN, officially terminates the iRobot deal, and Roomba to lay off 31% of staff

Amazon, $AMZN, officially terminates the iRobot deal, and Roomba to lay off 31% of staff, per TechCrunch.


The deal's future became uncertain after The Wall Street Journal reported that the European Union (EU) would not provide regulatory approval.

In July, the European Commission, the EU's executive body, initiated an investigation, expressing concerns that the proposed deal might allow Amazon to impede iRobot's competitors from effectively participating in Amazon's online marketplace. The commission suggested that Amazon could potentially remove or diminish the visibility of rival products in search results or other areas.

Margrethe Vestager, the European Commission's executive vice president, stated, "Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores." She highlighted that Amazon's dominance in the marketplace could lead to reduced competition in the robot vacuum cleaner market, resulting in higher prices, lower quality, and less innovation for consumers.

Expressing disappointment, David Zapolsky, Amazon's Senior Vice President and General Counsel, stated, "We’re disappointed that Amazon’s acquisition of iRobot could not proceed."

Following the termination, iRobot announced plans to concentrate on margin improvements, reduce spending on research and development, and halt work on "non-floorcare" products, including air purifiers and robotic lawn mowers.

Although iRobot expressed disappointment over the conclusion of the deal with Amazon, it affirmed a commitment to moving forward by focusing on the development of thoughtful robots and intelligent home innovations.

As part of the agreement's termination, Amazon will pay iRobot the agreed-upon $94 million breakup fee. The deal, initially disclosed in 2022, would have valued iRobot at approximately $1.7 billion.

iRobot's market capitalization has now fallen below $400 million, reflecting the impact of the news and prior indications that the EU would oppose the deal.

In July, iRobot secured a $200 million financing facility from the Carlyle Group to support its operations until the completion of the Amazon deal.