Shares of iRobot, best known for its Roomba vacuum cleaner, took a sharp 17% dip following a stern warning from the European Union’s antitrust regulator regarding Amazon’s proposed $1.7 billion acquisition of the robotics manufacturer. The European Commission initiated an in-depth investigation in July, with a verdict expected by February 14.
In an official statement, the commission expressed provisional concerns about the acquisition, stating that it “may limit competition in the market for robot vacuum cleaners.” Amazon responded by affirming its commitment to working closely with the commission to address the identified issues.
iRobot, a key player in the competitive vacuum cleaner market, is recognized for its practical and innovative product offerings. Amazon, optimistic about the potential synergy, believes that the acquisition could provide iRobot with the resources needed to accelerate innovation, invest in critical features, and ultimately lower prices for consumers.
The announcement led to a momentary halt in iRobot shares on Monday afternoon, with Amazon’s shares concurrently witnessing a modest 1.4% rise.
Amazon had unveiled its intent to acquire iRobot in August 2022, proposing a per-share price of $61. The deal is currently under scrutiny by the U.S. Federal Trade Commission, while the UK’s Competition and Markets Authority, as of June, did not foresee a “substantial lessening of competition” in the UK arising from the agreement.
As both regulatory bodies continue their assessments, the outcome will shape the future trajectory of this high-profile acquisition, influencing not only the involved companies but also the competitive landscape of the burgeoning robot vacuum cleaner market. Investors and industry observers keenly await the decisions that will unfold in the coming months.