IRobot Fall Continues On Reports Of EU Regulator's Plan To Block Amazon Acquisition

(RTTNews) - The European Union's competition regulator plans to block Amazon.com Inc.'s proposed $1.4 billion acquisition of robot vacuum maker iRobot Corp., reports said.

Following the news, the shares, which fell more than 14 percent on Thursday's regular trading on Nasdaq, extended its loss by 38 percent in the pre-market activity on Friday.

Amazon, during its meeting with European Commission's officials, was informed that the deal was likely to be rejected.

It was in August 2022 that Amazon announced an agreement to acquire iRobot for $61 per share in an all-cash transaction then valued at approximately $1.7 billion, including debt.

Amazon, which mainly provides an online marketplace allowing retailers to advertise and sell products including robot vacuum cleaners or RVCs, also holds a portfolio of smart devices such as Alexa voice assistant, security devices and wall-mounted smart displays. iRobot, which manufactures RVCs, sells them also through Amazon's online marketplace.

The proposed transaction was notified to the Commission on June 1 last year, and the in-depth investigation regarding the deal was opened on July 6.

In late November, the European Commission, which was probing Amazon's proposed acquisition of iRobot, had said that it has competition concerns regarding the deal.

According to the Commission, Amazon may restrict competition in the European Economic Area or EEA-wide and/or national markets for RVCs, by hampering rival RVC suppliers' ability to effectively compete.

In its previous statement of objections, the European regulator had said it informed the tech major of its preliminary view that the proposed acquisition of iRobot might restrict competition in the market for the manufacturing and supply of RVCs.

However, the tech giant major failed to offer remedies until the January 10 deadline to address the antitrust regulator's concerns.

Following the companies' deal, the U.S. Federal Trade Commission in late September had requested them for more information on the tech giant's buyout of the Roomba vacuum maker.

It was reported earlier that more than two dozen groups wrote to the FTC alleging the deal could help Amazon "entrench their monopoly power in the digital economy."

The UK's Competition and Markets Authority or CMA also had launched a probe into the proposed acquisition of iRobot by Amazon. However, the British antitrust regulator later cleared the proposed deal noting that it would not lead to competition concerns in the UK.

The EU's competition regulator now has time until February 14 to take a final decision.

On the Nasdaq, iRobot shares closed Thursday's regular trading at $23.62, down 14 percent. In the pre-market activity on Friday, the shares were losing around 37.7 percent to trade at $14.72.