Amazon drops $1.4 billion bid for iRobot amid disagreements with EU regulators threatening to block the deal in 2022.
ADVERTISEMENTAmazon has abandoned its intended $1.4 billion (€1.3 billion) acquisition of iRobot, the maker of Roomba, following disagreements with European Union regulators who warned of blocking the deal.
The European Commission informed Amazon in November that it believed the company's purchase could restrict competition in the robot vacuum cleaners market, particularly as other manufacturers sell their vacuums through the online marketplace.
"Amazon may have the incentive to foreclose iRobot's rivals because it may be economically profitable to do so," a statement from the European Commission said.
However, according to Amazon's senior legal executive, David Zapolsky, the decision goes against customers' interests.
"This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable," Zapolsky said in a statement.
The founder of iRobot, Colin Angle, insisted that, despite the disappointment of terminating the agreement with Amazon, it would not hinder the company's commitment to innovation.
"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," he stated.
The firms have agreed to a termination deal that settles all unresolved issues from the transaction. This includes Amazon paying a previously agreed termination fee to iRobot, the amount of which has not been disclosed.
The Roomba maker, meanwhile, has today revealed plans to cut 31% of its workforce, - approximately 350 employees - and announced the immediate departure of chairman and CEO Colin Angle.
