IT Home News on January 29, Amazon and iRobot said today that the two sides have reached an agreement to terminate the previously announced acquisition agreement, according to which Amazon will pay $1.4 billion (IT Home Note: currently about 100RMB6.6 billion) to acquire irobot. iRobot also announced that as part of the restructuring, the company will lay off about 350 people, or about 31% of its workforce, and expects to notify most affected employees by the end of March.
The announcement also said that iRobot's co-founder and CEO, Coin Angle, who co-founded iRobot in 1990, will step down as CEO. Glen Weinstein, the company's current executive vice president and chief legal officer, will serve as interim CEO, and Andrew Miller, a former independent director of the board, will take over as chairman. iRobot said it wants to restore profitability by focusing on "the most profitable customers, geographies and channels".
The deal collapsed means Amazon will pay iRobot $94 million in termination fees, with most of the funds going to repay the $200 million loan that iRobot received last year. As part of today's announcement, iRobot also announced preliminary results for the fourth quarter of 2023, which are expected to report 26.5 billion to 2GAAP operating loss of $8.5 billion.
The deal was previously bogged down by regulatory hurdles in the EU. In November last year, the European Commission said the deal had the potential to limit competition in the robot vacuum cleaner market. Many of irobot's competitors also sell products on Amazon's e-commerce platform, and regulators are concerned that Amazon may take competitors' robot vacuum cleaners off the shelves or reduce their ratings, limiting competition and "resulting in higher products, lower quality, and less innovation."
Amazon had time to try to convince the European Commission to approve the deal, but according to Politico, it did not offer any concessions before the January 10 deadline. The companies first announced the deal in August 2022 and received approval from the UK competition regulator in June 2023.
In recent years, a number of major tech acquisitions have collapsed as regulators around the world have stepped up scrutiny. Adobe abandoned a $20 billion deal to acquire Figma late last year under pressure from UK and EU regulators, Nvidia officially abandoned a $40 billion deal to acquire Arm in early 2022 due to "major regulatory challenges", and Meta also failed to acquire Giphy. Microsoft's successful acquisition of Activision Blizzard was only possible after making concessions to the UK and EU authorities.
Previously, it was relatively easy for Amazon to make acquisitions in the smart home space. In 2017, it acquired Blink, a camera and doorbell company, in 2018, Ring, a home security company, and in 2019, Eero, a mesh router company. After that, Amazon retains the independent brands of these companies and continues to sell competitors' devices through its **store.