Amazon has dropped its planned $1.4bn (£1.1bn) acquisition of the Roomba maker iRobot, amid EUopposition to the deal.
The e-commerce company will pay a $94m break fee to iRobot, which immediately announced plans to axe 31% of its workforce – or 350 employees – and the departure of its chief executive.
The Wall Street Journal had reported on 18 January that the EU’s executive arm was preparing to block the deal and had informed Amazon of its proposed view.
Amazon and iRobot said in a joint statement the takeover had “no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together”.
David Zapolsky, the Amazon general counsel, said: “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.”
The European Commission had formally raised concerns about the deal in November, saying it could restrict competition in the robot vacuum cleaner market. The commission’s concerns included Amazon reducing the visibility of rival vacuum cleaners on its retail platform.
Amazon had announced the deal in August 2022. The online retailer, which already owns Alexa and Ring, was pushing to expand its stable of smart home devices.
The UK competition regulator cleared the takeover in June last year. However, the deal had also been under scrutiny by the Federal Trade Commission, the US competition watchdog.
Campaign groups on both sides of the Atlantic have warned against the deal. In September 2022 a group of US organisations including the Open Markets Institute and the National Domestic Workers Alliance wrote to the FTC’s chair, Lina Khan, to claim that the deal would “endanger fair competition and open markets while also jeopardising consumer privacy”.
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In the UK, Foxglove Legal, a tech watchdog group, claimed the proposed takeover was an example of Amazon habit of “‘snuffing out’ innovative entry and broader competition in existing and emerging markets”.
Colin Angle, the founder of iRobot, who has immediately stepped down as chair and chief executive on the news, said the termination of the deal was “disappointing”. He added: “iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love.”
