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Monday, March 4, 2024

Amazon abandons $1.4 billion deal to purchase Roomba maker iRobot

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Amazon’s deal to purchase Roomba maker iRobot is off, the companies announced today, after iRobot stated the deal has “no path to regulatory approval within the European Union.” iRobot can also be asserting that it’s shedding round 350 workers, or round 31 % of its workforce as part of a restructuring. It expects to inform the vast majority of affected workers by the tip of March.

As a part of the announcement, iRobot chair and CEO Colin Angle, who co-founded the corporate in 1990, is stepping down. iRobot’s present government vice chairman and chief authorized officer, Glen Weinstein, will function interim CEO, and Andrew Miller, previously lead impartial director of the board, will turn into chair. iRobot says it hopes to return to profitability by specializing in its “most worthwhile prospects, geographies, and channels” together with direct-to-consumer gross sales.

The collapse of the deal means Amazon can pay a $94 million termination price to iRobot, which is able to largely be used to repay a $200 million mortgage it took out final yr. As a part of right now’s announcement, iRobot revealed its preliminary fourth quarter outcomes for 2023 and stated it expects to report a GAAP working lack of “between $265 and $285 million.”

The announcement comes after the $1.4 billion acquisition bumped into difficulties with EU regulators. Final November, the European Commission said it believed the deal had the potential to limit competitors within the robotic vacuum cleaner market. A lot of iRobot’s rivals additionally promote their units on Amazon’s on-line retailer, and regulators have been involved that Amazon might delist or cut back the visibility of rival robotic vacuum cleaners, limiting competitors and “resulting in greater costs, decrease high quality, and fewer innovation for customers.”

“Undue and disproportionate regulatory hurdles discourage entrepreneurs”

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In an announcement, Amazon SVP and common counsel David Zapolsky stated he was “upset” that the deal couldn’t proceed. “This consequence will deny customers quicker innovation and extra aggressive costs, which we’re assured would have made their lives simpler and extra satisfying,” Zapolsky stated. “Mergers and acquisitions like this assist firms like iRobot higher compete within the world market, significantly towards firms, and from international locations, that aren’t topic to the identical regulatory necessities in fast-moving expertise segments like robotics. Undue and disproportionate regulatory hurdles discourage entrepreneurs, who ought to have the ability to see acquisition as one path to success, and that hurts each customers and competitors.”

Within the time since asserting its plans to purchase iRobot, Amazon’s units and providers enterprise has gained a brand new boss. When the deal was first introduced, Dave Limp was nonetheless serving as Amazon {hardware}’s prime government. However as of the tip of October 2023, Limp had been replaced by Panos Panay, who moved into the position from Microsoft, whereas Limp has transitioned to CEO of Jeff Bezos’ aerospace firm, Blue Origin.



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