Amazon, iRobot call off $1.4 billion acquisition
Amazon is no longer seeking to purchase the maker of the Roomba robotic vacuum.
Amazon and iRobot have entered into a mutual agreement to terminate their acquisition agreement, originally signed in August 2022, under which Amazon would have acquired iRobot for $1.4 billion in cash.
The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Amazon paying iRobot the previously agreed upon $94 million termination fee. In July 2023, Amazon and iRobot agreed to lower the purchase price from roughly $1.7 billion to $1.4 billion.
When it was initially announced, the deal marked Amazon’s second billion-dollar acquisition in less than a month (and fourth largest ever). In late July 2022, the company entered into an agreement to acquire One Medical, a membership-based primary health care provider, for $3.9 billion. That purchase was finalized in February 2023.
iRobot was founded in 1990 by the Massachusetts Institute of Technology roboticists. It is best known for its Roomba robot vacuum, which it introduced in 2002. The company has expanded its product portfolio over the years, and it now includes technologies and advanced concepts in cleaning, mapping and navigation that are designed to help consumers make their homes easier to maintain and healthier.
From Alexa to Ring doorbells, Amazon has been expanding in the smart home space. In 2021, it introduced the Astro home assistant robot. The company is also heavily involved in developing robotic supply chain technology.
The Federal Trade Commission (FTC) had investigated the deal for possible antitrust violations. In addition, Reuters reports that the primary reason for the companies scuttling the planned acquisition is that European Union (EU) regulators showed no signs of being willing to approve it.
Reuters also reports that iRobot is undergoing a restructuring program to reduce costs in the wake of this acquisition not going through, which will include the reduction of about 350 jobs (close to one-third of its workforce) and founder/CEO Colin Angle stepping down from the CEO role.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon senior VP and general counsel, in an official statement from the two companies. “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.”
“iRobot is an innovation pioneer with a clear vision to make consumer robots a reality,” said Colin Angle, founder of iRobot, in the statement. “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.”