Shares of iRobot, renowned for its Roomba vacuum cleaner, experienced a 17% decline following a warning from the European Union’s antitrust regulator regarding Amazon’s proposed $1.7 billion acquisition. The European Commission initiated a thorough investigation in July, expressing provisional concerns about potential competition limitations in the robot vacuum cleaner market.
Expected to render a verdict by February 14, the commission conveyed its apprehensions to Amazon, stating that the acquisition of iRobot might restrict competition. An Amazon spokesperson assured CNBC that the company is actively collaborating with the commission to address the identified issues in the ongoing investigation.
iRobot, facing stiff competition in the vacuum cleaner sector, is recognized for its practical and innovative product offerings. The potential acquisition by Amazon, according to an Amazon spokesperson, could provide iRobot with the necessary resources to expedite innovation, invest in essential features, and simultaneously reduce prices for consumers.
The news prompted a temporary stall in iRobot shares during Monday afternoon trading, while Amazon’s shares saw a modest uptick of approximately 1.4%.
Amazon had revealed its intention to acquire iRobot in August 2022 at a price of $61 per share. The agreement is concurrently under scrutiny by the U.S. Federal Trade Commission. Notably, the UK’s Competition and Markets Authority had previously indicated in June that the acquisition wouldn’t result in a “substantial lessening of competition” in the UK.
As the European Commission’s investigation progresses, the outcome is poised to impact the trajectory of this high-profile acquisition, potentially reshaping the landscape of the robot vacuum cleaner market. Investors and industry observers await further developments in this unfolding regulatory drama.