Amazon drops $1.4 billion deal with iRobot amid EU resistance, spurring layoffs

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(Image credit: Andrew Martonik / Android Central)

What you need to know

  • Amazon announces it has come to a "mutual" agreement with iRobot to terminate its previous $1.4 billion deal to acquire the Roomba maker.
  • The EU gave Amazon some strong pushback as antitrust regulators were concerned over how such an acquisition could impact several countries.
  • Since its termination, iRobot will lay off 31% of its workforce while its CEO and Chairman, Colin Angle, resigns amid company "challenges."

Amazon announced it has terminated its previous acquisition of Roomba maker iRobot for approximately $1.4 billion. The company states the agreement to terminate was "mutual" and that the acquisition would've resulted in cash consideration. Furthermore, leaving the deal will resolve "all outstanding matters" alongside the termination fee both companies agreed upon prior.

Amazon will have to pay iRobot $94 million as a result of the termination of the acquisition, according to The Verge. It's speculated the company could use the payment to give itself some breathing room with its $200 million loan taken out during 2023.

However, Amazon and iRobot agreeing to part ways seems to have to do with resistance it faced in the EU, as per Reuters. On Monday (Jan. 29), EU antitrust chief Margrethe Vestager said, "The acquisition of iRobot would have enabled Amazon to foreclose iRobot's rivals by restricting or degrading access to Amazon stores."

In a previous report, it was stated by those closest to the matter that Amazon "declined" to address EU antitrust regulator concerns. The European Commission was primarily concerned about the acquisition's effects on those in France, Germany, Italy, and Spain.

Amazon and iRobot's termination was likely done to get ahead of the inevitable as Reuters adds the EU was planning on rejecting it, anyway.

The deal's end has spurred a 31% layoff of iRobot's workforce, meaning around 350 people have lost their jobs. This is wrapped in the company's apparent "operational restructuring," which may help stabilize, offer key growth, and bring more profitability to iRobot. The company's now-former Chairman and CEO, Colin Angle, has also resigned. Angle stated he and the board have decided "that iRobot will be better served by a new leader with turnaround experience."

Challenges within the company have led them to this decision.

iRobot Roomba on hardwood floor

(Image credit: iRobot)

Amazon broke the news of its near-$1.7 billion acquisition of iRobot in August 2022. The company remained confident that it could bring "bigger smart home commitment" to iRobot's products should the deal proceed. Amazon was prepared to purchase iRobot for $61 per share and cover the company's net debt with the deal.

It also appears the EU's decision to reject Amazon and iRobot's deal is because of its Digital Markets Act (DMA). The Commission detailed six big tech companies that would be deemed "gatekeepers" and over 20 services that warrant the new title. The DMA aims to encourage better, healthier competition amongst large technology companies to avoid consumers being forced into unhealthy practices.

Nickolas Diaz
News Writer

Nickolas is always excited about tech and getting his hands on it. Writing for him can vary from delivering the latest tech story to scribbling in his journal. When Nickolas isn't hitting a story, he's often grinding away at a game or chilling with a book in his hand.