iRobot Terminates Acquisition Agreement with Amazon After Reported Deal Fallout

In a surprise move, Amazon has terminated its bid to acquire iRobot, the maker of robotic vacuums. The decision comes after months of regulatory scrutiny from European authorities.

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Mutual Termination Agreement

The two companies have mutually agreed to terminate their acquisition agreement, which would have seen Amazon purchase iRobot for around $1.7 billion in cash. This marks a significant setback for Amazon’s efforts to expand its presence in the consumer robotics market.

Regulatory Hurdles

According to the companies, regulatory approval from European authorities proved elusive. The European Commission had launched an in-depth investigation into the acquisition, citing concerns that it could lead to anti-competitive practices and foreclose rivals.

"We’re disappointed that Amazon’s acquisition of iRobot could not proceed," said David Zapolsky, Amazon SVP and General Counsel. "We believe in the future of consumer robotics in the home and have always been fans of iRobot’s products."

Termination Fee

iRobot will receive a $94 million termination fee from Amazon as part of the agreement.

Operational Restructuring Plan

The failed acquisition will necessitate an operational restructuring plan for iRobot. The company has announced plans to lay off around 350 employees, roughly 31% of its workforce, by April. This move comes on top of previous cost-cutting measures taken by the company in recent months.

Background

iRobot was founded in 1990 by Rodney Brooks, Helen Greiner, and MIT Artificial Intelligence Lab members. The company introduced the Roomba brand in 2002, which has since become synonymous with robotic vacuums. Amazon, too, has been aggressively expanding its presence in the robotics space through partnerships with other companies.