In a significant blow to iRobot, renowned for its Roomba vacuum cleaner, shares plummeted by 17% following a stern warning from the European Union’s antitrust regulator. The cautionary note revolves around Amazon’s proposed $1.7 billion acquisition of iRobot, with the European Commission expressing apprehensions about potential competition constraints.
The European Commission initiated a thorough investigation into the acquisition in July, with a ruling anticipated by February 14. In a preliminary statement, the commission conveyed concerns to Amazon, suggesting that the proposed acquisition of iRobot could curtail competition in the robot vacuum cleaner market. An Amazon spokesperson assured CNBC that the company is actively collaborating with the commission to address the issues identified during the investigation.
iRobot, facing stiff competition in the vacuum cleaner sector, is recognized for its innovative products such as the Roomba. Amazon, with its vast resources, aims to accelerate innovation for iRobot while potentially driving down consumer prices.
“iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products. We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers,” stated an Amazon spokesperson.
The market response was swift, with iRobot shares experiencing a notable dip after the announcement, contrasting with a modest 1.4% rise in Amazon shares.
Amazon’s pursuit of iRobot was disclosed in August 2022, with a proposed acquisition price of $61 per share. Concurrently, the agreement is undergoing scrutiny from the U.S. Federal Trade Commission. Notably, the UK’s Competition and Markets Authority previously indicated in June that the deal posed no significant threat to competition in the UK. As regulatory bodies continue to evaluate the acquisition, the future of this high-profile deal remains uncertain, with potential ramifications for both iRobot and Amazon in the evolving landscape of consumer technology.