Amazon (AMZN) – Get a free report has a long history of absorbing companies in acquisitions, from Whole Foods and Audible to Zappos, Woot and Ring.
However, the e-commerce giant has decided to put the brakes on one of its most recent planned purchases. On January 29 Amazon announced which would end its pending acquisition of iRobot, the maker of smart vacuum cleaners. He originally said on Aug. 4, 2022, that he would pay $61 per share, or $1.7 billion, for the company.
Related: iRobot sinks amid concerns regulators will void Amazon deal
The decision is described as mutual, and both Amazon and iRobot expressed their disappointment in the decision in separate statements. Amazon made general reference to previously reported news that the European Union tried to block the agreement for competition reasons.
“We are disappointed that Amazon's acquisition of iRobot could not go through,” said David Zapolsky, senior vice president and general counsel at Amazon. “(iRobot products delight) consumers and solve problems in ways that improve their lives…This outcome will deny consumers faster innovation and more competitive prices…
“Mergers and acquisitions like this help companies like iRobot better compete in the global market, particularly against companies and countries that are not subject to the same regulatory requirements in fast-moving technology segments like robotics.
“Undue and disproportionate regulatory obstacles discourage entrepreneurs, who should be able to see acquisition as a path to success, and that harms both consumers and competition – precisely the things regulators say they are trying to protect.” .
Colin Angle, founder of iRobot, also had some ideas.
“iRobot is an innovation pioneer with a clear vision of making consumer robots a reality. “The termination of the deal with Amazon is disappointing, but iRobot now looks to the future with a focus and commitment to continuing to build thoughtful robots and life-enhancing smart home innovations that our customers around the world love.”
Amazon paid iRobot a termination fee of $94 million for the canceled acquisition.
The announcement is a blow to iRobot, which said on January 29 that it would cut nearly a third (31%) of its workforce. Shares took a hit on Monday, eventually falling 15% to $14.36 per share.
Customer concerns about iRobot increased in December 2022. MIT technology Review published an article claiming that vacuum cleaners were filming inappropriate scenes and sending the data to Scale ai, a company that uses the images, along with video and audio data, to train artificial intelligence.
While the editorial didn't affect iRobot's stock at the time, the news that the EU blocked Amazon's acquisition did, sending the stock down more than 50% in the month of January.
