Amazon's iRobot deal collapses

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Amazon's planned acquisition of iRobot, the maker of the Roomba vacuum, has been terminated due to regulatory opposition, particularly from the European Union. The deal, which was first announced in August 2022, was valued at $1.4 billion. However, the European Commission raised concerns that the merger could restrict competition in the robot vacuum cleaner market, leading to the collapse of the deal147. As a result of the deal's termination, Amazon will pay iRobot a $94 million termination fee12. iRobot has also announced a significant restructuring plan, which includes laying off approximately 31% of its workforce, or around 350 employees23. Colin Angle, the Chairman of the Board of Directors and CEO of iRobot, will step down, and Glen Weinstein, the company’s EVP and Chief Legal Officer, has been appointed as Interim CEO2. The collapse of the deal has had immediate financial repercussions for iRobot, with its stock plunging in trading2. The company is also expected to report a 25% decline in year-over-year revenue for FY23, with an adjusted operating loss of around $200 million2. Additionally, iRobot plans to scale back its office footprint and reduce spending on research and development, pausing work on non-floorcare innovations such as air purification, robotic lawn mowing, and education5. Amazon's SVP and General Counsel, David Zapolsky, expressed disappointment at the outcome, stating that regulatory hurdles discourage entrepreneurs and harm consumers and competition13. The company had hoped that the acquisition would allow for faster innovation and more competitive prices in the consumer robotics market1. The European Commission's formal objections to the deal were part of broader antitrust scrutiny, which includes allegations that Amazon prioritizes its own products over others7. The decision to block the merger is seen as a stand against Amazon's growing market power7.
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