AFPDerman customers are considering purchasing a robot vacuum cleaner
NOS Nieuws•vandaag, 20:06
The takeover of the maker of robot vacuum cleaners, iRobot, by online retailer Amazon is cancelled. The companies announced this today. They speak of “unjustified and disproportionate regulatory hurdles that discourage entrepreneurs”.
On paper, the acquisition of robot vacuum cleaner manufacturer iRobot would have fitted in perfectly with Amazon’s strategy. The online store would strengthen its position in the market for smart home products.
Unfair competition
The cancellation of the takeover follows a decision by competition watchdogs in Europe and the US. Brussels and the American regulator FTC do not approve the plans, because they fear unfair competition within the robot vacuum cleaner market.
According to them, if the takeover had been approved, Amazon could have acquired too dominant a position in that market. The regulators were afraid that Amazon would give iRobot’s vacuum cleaner, the Roomba, a preferential position in its online store. They also feared for user privacy and Amazon’s power due to the amount of data that could be collected.
European Commission officials have said Bloomberg already shared their concerns with Amazon last week. They had asked the company to meet their competition concerns. The online store decided not to respond to this, and instead to prepare legal action against the decision.
iRobot in dire straits
Amazon announced the deal with iRobot, worth approximately 1.67 billion euros, in the summer of 2022.
The consequences of canceling the takeover are major for iRobot. Immediately after the news, the vacuum cleaner maker announced that it will lay off 350 employees. That is almost a third of the total workforce. CEO Colin Angle is also resigning with immediate effect.
Shortly after the announcement, the iRobot share price was down more than 10 percent. This is on top of previous price falls in the past year: the company is now worth more than 60 percent less than a year ago.
2024-01-29 19:06:19
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