In a joint announcement on Monday, Amazon and iRobot revealed that they have decided to terminate their planned acquisition agreement. The decision comes as a result of their belief that there is no clear path to obtaining regulatory approval from the European Union for the deal.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon’s senior vice president, and general counsel. He added, “This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable.”
The Wall Street Journal had previously reported in January that representatives from Amazon had met with officials from the European Commission to discuss the acquisition. During these discussions, they were informed that the deal would likely face rejection by the regulatory body.
The acquisition agreement, which was announced in August, outlined Amazon’s plan to acquire iRobot at a price of $61 per share in cash. This deal valued iRobot, known for its robotic cleaning products, at approximately $1.7 billion, including debt.
Following the announcement of the termination of the deal, iRobot’s stock experienced a significant decline, tumbling 21% in early trading on Monday. This drop adds to the company’s year-to-date decline of 56%. In contrast, the S&P 500 index has seen a gain of 2.5% over the same period.
The termination of the acquisition deal marks a setback for both companies, as they had anticipated the acquisition to bolster their positions in the market and drive innovation in the consumer technology sector. However, with regulatory hurdles proving insurmountable, both Amazon and iRobot will now need to reassess their strategies for growth and expansion in the European market.
(Source: CNBC | WSJ | MarketWatch | Amazon)
