It’s been 18 months since Amazon stunned the smart home world by announcing its plan to snap up Roomba manufacturer iRobot. Today, Amazon dealt out another shocker: It’s backing away from the blockbuster deal.
In a joint statement, Amazon and iRobot said they’ve mutually decided to “terminate” the acquisition agreement that the two companies inked in August 2022. Amazon will still have to pay iRobot a termination fee, the statement said.
So, what scuttled the deal? According to the joint statement, Amazon’s plan to buy iRobot has “no path to regulatory approval in the European Union.”
This news story is part of TechHive’s in-depth coverage of the best robot vacuums.
Incidentally, the news comes just days after Apple announced massive changes to its App Store policies to comply with the EU’s Digital Markets Act.
While the two events aren’t directly related, they demonstrate how the EU is flexing its regulatory muscles to keep tech giants like Amazon and Apple in check.
In any event, today’s news marks the end of a chapter that would have seen the world’s biggest retailer gobbling up the biggest manufacturer of robot vacuums.
Word that Amazon’s planned acquisition of iRobot would run afoul of EU regulators emerged late last week, leading to a nose-dive in iRobot shares.
The nixed deal will send shockwaves through iRobot, which will lay off roughly 350 workers in the coming weeks, or nearly a third of its staff. IRobot CEO Colin Angle has also been sent packing.
In its joint statement with iRobot, Amazon SVP David Zapolsky decried the “undue and disproportionate regulatory hurdles” that killed the would-be deal, arguing that “this outcome” would “deny customers faster innovation and more competitive prices.”
Perhaps, but an Amazon acquisition of iRobot (the deal was said to be worth $1.7 billion) would have upended the lively and competitive robot vacuum market, which includes brands such as Ecovacs, Roborock, and Shark.
Amazon’s plan to buy iRobot also sparked plenty of privacy concerns, given that the most advanced robot vacuums can map the layout of your home and use cameras to navigate around obstacles on the floor.
Amazon had previously elbowed its way into security cameras with its 2017 acquisition of security camera manufacturer Blink, followed by Ring just a few months later.
