Home News Roomba-Maker iRobot Shares Plunge on Reports Amazon Acquisition Is in Jeopardy

Roomba-Maker iRobot Shares Plunge on Reports Amazon Acquisition Is in Jeopardy

by SuperiorInvest

Key takeaways

  • Shares of iRobot Corp. fell nearly 30% on Friday after it was reported that Amazon.com Inc.’s acquisition of the company could be blocked by European Union (EU) antitrust regulators.
  • A news report on Thursday said European Commission officials had told Amazon that the deal was unlikely to be allowed for anti-competitive reasons.
  • The European Commission’s final decision on Amazon’s acquisition of Roomba must be made by February 14.

Shares of iRobot Corp. (IRBT), the company behind the Roomba robot vacuum cleaner, lost nearly a third of their value on Friday amid reports that it and its acquirer Amazon.com Inc. (AMZN) are in the crosshairs of the antitrust measures of the European Union (EU). regulators.

The Wall Street Journal It reported late Thursday that European Commission officials had told Amazon representatives that the deal was likely to be blocked, according to people familiar with the discussions. The commission has until February 14 to make a final decision.

It’s been a long and winding road for Amazon in its attempts to buy the Roomba maker. The companies first announced the deal in August 2022, when Amazon said it would pay $61 per share, or $1.7 billion.

Regulators in the US, UK and EU were quick to say they would study the acquisition. The UK Competition and Markets Authority investigated the deal before approving it in June. Shortly after, European regulators opened a formal investigation into whether the acquisition would allow Amazon to stifle competition in the robot vacuum market.

Then, in late July, Amazon reduced its offer to $51.75 per share, or $1.4 billion, after iRobot took on new debt.

The deal was reportedly on track to win unconditional approval from EU regulators in mid-November, news that sent iRobot shares soaring. Those reports were proven inaccurate just days later, when regulators sent Amazon an official statement of objections, inviting the company to propose concessions that would ensure it would not give preferential placement to iRobot products in its marketplace.

Since then, the acquisition appears to be in jeopardy. Amazon missed its deadline to offer concessions last week, sparking speculation that the company could abandon the deal entirely.

iRobot shares plunged early and were trading nearly 30% lower at about $17 as of 12:22 p.m. ET on Friday. Amazon shares rose slightly to $154 after a brief decline earlier in the day.

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