Amazon has nixed plans to buy Roomba maker iRobot after the companies mutually determined the pending acquisition has “no path to regulatory approval in the European Union.”
In a related announcement Monday, iRobot revealed that it would lay off about 350 employees, or 31% of its overall workforce, as part of a restructuring effort. Colin Angle will step down as chairman and CEO of iRobot, with chief legal officer Glen Weinstein stepping in as his interim replacement.
The shock decision came after reports surfaced earlier this month that the European Commission – the European Union’s antitrust watchdog – was planning to block the deal. Amazon had agreed to buy iRobot for $1.7 billion in August 2022.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” Amazon general counsel David Zapolsky said in a statement.
“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable,” Zapolsky added.
Shares of iRobot plunged more than 17% in premarket trading after the announcement. Amazon shares were flat.
Amazon will pay iRobot a $94 million termination fee. As part of its company-wide shakeup, iRobot said it would be “pausing all work related to non-floorcare innovations, including air purification, robotic lawn mowing and education.”
“The termination of the agreement with Amazon is disappointing, but 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,” iRobot’s Angle said in a statement.
The European Commission initially raised concerns last fall that the Amazon-iRobot deal could hurt competition and stifle growth by other robot vacuum makers.
Regulators pointed to the possibility that Amazon could limit iRobot’s competitors from selling their products on its online marketplace.
This story originally appeared on NYPost
