Amazon.com Inc. will not acquire iRobot, the companies jointly announced Jan. 29. The proposed acquisition has “no path to regulatory approval in the European Union,” according to the statement.

The retailer will pay iRobot a termination fee of $94 million.

Amazon ranks No. 1 in the Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. iRobot Corp. ranks No. 396.

Amazon also ranks No. 3 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by third-party gross merchandise volume (GMV). Digital Commerce 360’s 2023 Global Online Marketplaces Report includes key insights into the biggest players in the database.

Terms of the deal

Amazon previously agreed to acquire iRobot in August 2022 for $1.65 billion. The deal would have brought iRobot’s Roomba vacuum under Amazon’s umbrella, alongside Amazon’s devices including the Echo, Ring and Kindle.

Had the deal gone through, it also would have been Amazon’s fourth-largest acquisition to date, The Wall Street Journal reported.

“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” Amazon senior vice president and general counsel David Zapolsky said in a statement. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality.”

Regulatory roadblocks

The European Commission opened an investigation into Amazon’s proposed acquisition of iRobot in July 2023. In November, the body released its findings that if the deal went through, Amazon might restrict competition for robot vacuum cleaners. 

“Amazon may have the ability and the incentive to foreclose iRobot’s rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs (robot vacuum cleaners) on Amazon’s online marketplace and/or at degrading their access to it,” the European Commission wrote. It noted that Amazon’s marketplace was a particularly important channel for consumers to find and purchase robot vacuum cleaners in France, Germany, Italy and Spain.

The Federal Trade Commission (FTC) also planned to sue to block the acquisition, the WSJ reported.

Amazon criticized regulators’ decisions.

“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” Zapolsky said. “Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition — the very things that regulators say they’re trying to protect.” 

What’s next for iRobot?

Following the announcement, iRobot plans to cut 350 jobs by the end of March. That amounts to 31% of the company’s workforce as part of a restructuring plan.

CEO and Chairman Colin Angle also stepped down from both roles, effective immediately. He was replaced by executive vice president and chief legal officer Glen Weinstein as interim CEO. 

“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love,” Angle said.

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