iRobot, renowned for its Roomba vacuum cleaner, witnessed a 17% dip in shares as the European Union’s antitrust regulator raised red flags over Amazon’s proposed $1.7 billion acquisition. The European Commission, currently conducting a thorough investigation initiated in July, indicated potential competition concerns and is slated to make a ruling on the matter by February 14.
In a stern statement, the commission expressed provisional apprehensions about Amazon’s acquisition of iRobot, suggesting it could limit competition in the burgeoning market for robot vacuum cleaners. Amazon, undeterred, conveyed its commitment to collaborating with the commission to address the identified issues and ensure a smoother approval process.
Facing stiff competition in the vacuum cleaner sector, iRobot is acknowledged for its practical and innovative product lineup. An Amazon spokesperson defended the acquisition, asserting that the tech giant could provide iRobot with the necessary resources to expedite innovation, invest in critical features, and simultaneously drive down prices for consumers.
Following the EU antitrust regulator’s warning, iRobot’s shares experienced a momentary halt, reflecting investor concerns. Conversely, Amazon’s shares saw a modest 1.4% increase, underscoring the market’s anticipation and confidence in the e-commerce giant’s strategic moves.
Amazon had initially disclosed its intent to acquire iRobot in August 2022 at $61 per share, a deal now subject to scrutiny not only by the EU but also by the U.S. Federal Trade Commission. Contrary to the EU’s reservations, the UK’s Competition and Markets Authority had earlier opined in June that the acquisition wouldn’t substantially impact competition in the UK.
As the regulatory landscape unfolds, the fate of this high-stakes acquisition hangs in the balance, with both iRobot and Amazon navigating through a complex web of antitrust scrutiny and market dynamics.
