American tech giant Amazon recently said it would no longer acquire robot vacuum cleaner iRobot, citing opposition from EU regulators. Amazon said the deal would not dispel concerns expressed by the European Commission in November — leading to fewer competitors and stifling competition in the industry.
The collapse of the deal led to iRobot laying off 350 employees, or a third of its workforce. The company's CEO, Colin Angle, will also be forced to resign.
In a statement, D**id Zapolsky, Amazon's senior vice president and general counsel, said: "We are disappointed that Amazon has not been able to proceed with the acquisition of irobot. This result will deprive consumers of faster innovation and more competitiveness**, and we believe that acquiring iRobot Sense will make their lives easier and more enjoyable." ”
Amazon abandoned the acquisition of irobot due to the attitude of the European Union
Amazon first offered to invest 14The $500 million acquisition of iRobot, which initially valued the manufacturer of Roomba robot vacuums at $1.7 billion.
The news initially caused unease among privacy activists. They argued that by combining camera data from the Ring doorbell with map data collected by iRobot vacuum cleaners, it would be a violation of users' privacy. The deal will give Amazon unprecedented access to information such as users' home layouts.
And the European Commission is mainly concerned that irobot's robot vacuum cleaner will gain a privileged position in Amazon's huge ** market. Although the UK's Telecom Authority (CMA) approved the deal in June 2023, claiming that the deal would not trigger a significant reduction in competition in the UK market, the European Commission said in November last year that its initial view was that it would certainly hinder market competition.
Amazon's abandonment of the acquisition of iRobot immediately triggered a termination agreement between the two companies. There is news that Amazon will pay irobot $94 million for this. However, this expense only partially improved iRobot's financial woes.
The Carlyle Group agreed to provide iRobot with a loan of about $200 million last July to fund its business operations until it was acquired by Amazon. In the preliminary results for the fourth quarter of 2023 announced a few days ago, iRobot confirmed that the loan includes 1$8.5 billion in cash, but the company's GAAP operating loss in 2023 has reached a whopping 2$8.5 billion.
The failed acquisition has left irobot's future uncertain
With the acquisition now terminated, iRobot will embark on an aggressive restructuring plan. The company said the plan will reduce its annual R&D expenses by $20 million and spend up to $13 million on employee severance pay and other related costs.
iRobot founder Colin Angle said, "The termination of the agreement with Amazon is disappointing. iRobot's eyes now turn to the future, focusing and committed to continuing to develop robots and smart home innovations that provide intimate services to make life better. Our products are widely welcomed by customers all over the world. ”
Amazon's senior vice president and general counsel, D**id Zapolsky, has been unabashedly slammed at EU regulators, suggesting that the European Commission's apparent refusal to change its initial views on the deal would prevent the EU from setting up new tech startups.
"M&A deals like this help companies like iRobot better compete in the global marketplace, especially with companies and countries that are not subject to the same regulatory requirements in fast-moving technology areas such as robotics," he said. Excessive and disproportionate regulatory hurdles will discourage investors and entrepreneurs, who often see mergers and acquisitions as a shortcut to success. ”