E-commerce giant Amazon’s planned acquisition of robotics company iRobot will not push through after the parties agreed to terminate their agreement, citing regulatory hurdles in the European Union.
IRobot has announced a significant restructuring plan to reduce costs and said it would cut about 31 per cent of its workforce, or 350 jobs. Founder Colin Angle has stepped down as CEO, saying given the current challenges, he and the board “mutually decided that iRobot will be better served by a new leader with turnaround experience”.
On August 4, 2022, the companies signed a deal where Amazon would acquire iRobot for $61 per share in an all-cash transaction valued at about $1.7 billion.
The deal was expected to support iRobot in lowering prices for products popular among its customers.
However, Amazon said overnight the acquisition of iRobot had no path to regulatory 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, SVP and general counsel at Amazon.
“Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition – the very things that regulators say they’re trying to protect.”
The companies have already signed a termination agreement, which includes Amazon paying a termination fee to iRobot.
“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love,” said Colin Angle, founder of iRobot.
- Additional reporting from Reuters.