(NewsNation) — A $1.7 billion deal between Amazon and iRobot, the creator of the Roomba robot vacuum cleaner, was terminated Monday reportedly over ongoing concerns that the 18-month-old pact would never satisfy objections from European Union regulators.
The deal, which was inked in 2022, has “no path to regulatory approval in the European Union,” according to an iRobot news release.
The company additionally announced it was laying off around 350 employees, or 31% of its workforce, according to a separate news release issued Monday. iRobot announced the layoffs as part of a restructuring plan that came amid fourth-quarter financial disclosures indicating that the company lost between $265 and $285 million.
iRobot Founder Colin Angle called the termination of the pact with Amazon “disappointing” in a statement. The two companies said they have signed a termination agreement that resolves all outstanding matters, including Amazon paying iRobot a previously agreed upon termination fee. Amazon will pay $94 million to kill the deal, iRobot reported in the news release.
Angle — who serves as iRobot’s chairman and CEO — will resign from both roles as part of the company’s restructuring. iRobot announced Executive Vice President and Chief Legal Officer Glen Weinstein will be the interim CEO.
Under the agreement, Amazon had the right to invest in iRobot’s innovative technology moving forward while providing the company a market to offer its products at lower prices to customers.
The deal reportedly ran into roadblocks, especially from European Union regulators who feared last fall that the pact could restrict competition in the robot vacuum cleaner marketplace, the report indicated.
Additionally, there were concerns Amazon’s acquisition of iRobot would give Amazon access to consumer’s private personal information.
Politico reported earlier this month that Amazon had until Jan. 10 to offer concessions to EU objections to the deal but failed to do so.
“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable,” David Zapolsky, Amazon’s senior vice president and general counsel said a statement issued by the company on Monday.
Zapolsky added that killing the deal will “deny consumers faster innovation and more competitive prices,” adding that the two companies were excited to see what they could build together.
“Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” Zapolsky said Monday. “Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.”
