Shares of iRobot took a nosedive, dropping over 33% in extended trading on Thursday, following reports that the European Union’s antitrust watchdog is gearing up to block Amazon’s proposed acquisition of the popular Roomba vacuum maker.
According to sources familiar with the matter, the European Commission held discussions with Amazon representatives on Thursday, during which it was indicated that the acquisition would likely face rejection by the regulatory body.
Both Amazon and the European Commission remained tight-lipped about the developments, with Amazon declining to comment and the Commission not immediately responding to requests for comment.
Amazon had announced its intentions to acquire iRobot back in August 2022 in a deal valued at $1.7 billion, offering $61 per share in an all-cash transaction. However, the European Commission initiated an in-depth investigation into the acquisition last July, expressing concerns about potential anticompetitive practices.
The Commission’s primary concern revolves around the possibility that Amazon, as the new owner of iRobot, could use its dominant position in online retail to stifle competition. It is feared that Amazon might favor iRobot’s products over those of its competitors, potentially harming fair competition in the market.
The European Commission is expected to make a final decision on the acquisition by February 14th. Recent reports from Politico suggest that Amazon does not plan to offer any concessions to address the Commission’s concerns, indicating a potential deadlock in the negotiations.
While the deal is still under review by the U.S. Federal Trade Commission, the U.K.’s Competition and Markets Authority previously stated that it did not foresee the acquisition resulting in a significant reduction of competition in the U.K. market.
As iRobot braces for a potentially challenging regulatory battle in the EU, the future of the acquisition hangs in the balance, with both companies awaiting the Commission’s verdict.
(Source: WSJ | Investing.com)
