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IRobot Shares Plunge After EU Blocks Amazon Deal

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IRobot Shares Plunge After EU Blocks Amazon Deal

(CTN News) – Shares of IRobot (IRBT.O), opens new tab fell 36% in premarket trading on Friday following a report that the European Union’s antitrust regulator was planning to block Amazon.com’s ($AMZN.O), opens new tab $1.4 billion acquisition of Roomba.

According to the Wall Street Journal, Amazon was informed during its meeting with the European Commission, the EU’s executive arm, that the deal was likely to be rejected.

In response to the regulator’s IRobot concerns that the deal might reduce competition and reinforce Amazon’s dominance of the e-commerce market, the U.S. tech giant did not offer remedies until the deadline of Jan. 10.

The company plans to take over the robotic vacuum company in August 2022 in order to add to its portfolio of smart devices, which includes the Alexa voice assistant, smart thermostats, security devices, and wall-mounted smart displays.

Regulatory obstacles may prevent the deal from going through, making it the second tech deal to be impeded in recent weeks. As there is no clear path for antitrust approvals in the IRobot European Union and the United Kingdom, Adobe (ADBE.O) canceled its $20 billion deal with design software maker Figma.

Regulators are concerned that the acquisition of smaller rivals may result in a few companies controlling the market by accessing large pools of customer data.

The offer by Amazon was slashed by approximately 15% in July as a result of fresh debt incurred by iRobot.

It was also in that same month that the EU warned Amazon that the deal, which had been approved by UK regulators, could reduce competition in the market.
As a result of the announcement of the deal, IRobot’s shares have fallen 53%.

Until February 14, the European Commission must either approve or reject the agreement.

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