The takeover of iRobot by Amazon falls through: the EU is singled out

© iRobot

Already very present in the home automation market, Amazon announced in 2022 an agreement with iRobot to buy this specialist in vacuum cleaner robots for $1.7 billion. This acquisition would have accelerated the development of iRobot vacuum cleaners, while allowing Amazon to strengthen its presence in the connected home sector. But ultimately, this acquisition will not happen.

Deal cancelled

In a joint press release, the two parties announced the cancellation of the deal. In it Amazon and iRobot indicate that there was no way to obtain the green light from the European Union, and deplore a “loss for consumers, competition and innovation”. As a reminder, the takeover project was the subject of an in-depth investigation by the European Commission.

As a preliminary matter, the Commission feared that Amazon could benefit iRobot , compared to other manufacturers of robot vacuum cleaners, on its market place. Then, following this in-depth investigation, Brussels sent a “statement of objections” to the e-commerce giant.

David Zapolsky, executive vice president at Amazon, says he is disappointed that the takeover will not ultimately happen. “Amazon and iRobot were excited to see what our teams could build together, and we are deeply grateful to everyone who worked tirelessly to try to make this collaboration a reality. This result will deprive consumers of faster innovation and more competitive prices, which we believe would have made their lives easier and more enjoyable”, he said .

Restructuring in sight at iRobot

Note that this decision is taken while the European Union is is preparing to apply the DMA, a new series of rules intended for tech giants, including Amazon. Otherwise, on the iRobot side, it has already announced a restructuring, following the cancellation of the deal.

The company designed its restructuring plan to focus on profitability and increasing market share in the mid- and high-end segments. Colin Angle, Chairman of the Board of Directors and CEO, has resigned. Acting CEO will be Glen Weinstein, Executive Vice President and General Counsel of iRobot.

New trajectory for iRobot

To reduce costs, iRobot will reduce its research and development expenses, as well as marketing expenses. Additionally, iRobot is suspending work that is not directly related to its vacuum cleaners. And moreover, this restructuring leads to the dismissal of nearly 350 employees, a reduction of 31%.

“With a legacy of innovation and a foundation of creativity, the Board of Directors and I believe that iRobot can – and will – expand its presence and continue to build a cutting-edge suite of robotic floor care solutions that help consumers make their homes easier to maintain and their living spaces healthier. However, to do this successfully, we must quickly align our operating model and cost structure with our future as a standalone company,” says Andrew Miller, the new Chairman of the Board of & #8217;administration.