Amazon and iRobot announced the abandonment of their proposed deal, citing the absence of a viable path to regulatory approval, in a joint statement released on Monday.

iRobot, known for its Roomba robotic vacuum cleaners, disclosed plans to lay off approximately 350 employees, 31% of its workforce. The company’s founder and CEO, Colin Angle, has stepped down with immediate effect.

The demise of the acquisition came to light following reports by The Wall Street Journal indicating that the European Union would not grant regulatory approval.

The European Commission, the EU’s executive body, initiated an investigation in July, expressing concerns that the deal could present antitrust concerns.

David Zapolsky, senior vice president and general counsel at Amazon, expressed disappointment in a release, saying: “We’re disappointed that Amazon’s acquisition of iRobot could not proceed.”

iRobot outlined its post-acquisition strategy, focusing on margin improvements, reducing research and development spending, and suspending work on “non-floorcare” products, including air purifiers and robotic lawn mowers.

Amazon has agreed to pay iRobot a prearranged $94m break-up fee. The terminated deal, initially announced in 2022, would have valued iRobot at approximately $1.7bn.

Research and analysis company GlobalData estimates that the global smart homes market will be worth $75.3bn by 2025, having grown at an annual growth rate of just below 16% from $35.9bn in 2020.

The deal termination raises questions about the future of iRobot, given the financial setbacks and regulatory challenges.

Regulators globally are intensifying scrutiny of leading technology companies due to potential anti-competitive effects. Amazon is currently under investigation by the Federal Trade Commission, with a focus on its investments and partnerships with AI developers like Anthropic and OpenAI.

In Europe, both the Competition and Markets Authority in Britain and the European Commission have intervened in various deals, including the Meta-Giphy acquisition, Adobe’s abandoned acquisition of Figma, Microsoft’s investment in OpenAI, and Microsoft’s purchase of Activision Blizzard.

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By GlobalData