iRobot stock tumbles on report that the EU may block Amazon’s acquisition of Roomba maker

 

By Tracy Brown Hamilton

The European Union’s competition watchdog appears set to thwart Amazon’s $1.4 billion acquisition of the robot vacuum maker iRobot, according to sources connected to the Wall Street Journal. This has triggered a sharp decline of almost 40% in the stock shares of the Roomba vacuum manufacturer, which plunged in after-hours trading following the report.

Shares of iRobot opened Friday morning at lows not seen in more than a decade.

The decision would deal a blow to Amazon’s strategic plans of diversifying its smart devices portfolio, which includes the Alexa voice assistant, smart thermostats, security devices, and wall-mounted smart displays.

Amazon declined to comment. Fast Company also reached out to iRobot for comment.

Reportedly, Amazon was notified during a meeting (February 14, 2024) with European Commission officials that the deal is likely to face rejection, citing potential anticompetitive effects on the robot vacuum cleaner market. The European Commission’s competition officials had raised its concerns in November, giving Amazon until January 10 to address them.

Amazon disclosed its plans to acquire iRobot in August 2022, aiming to expand its presence in the smart home devices market. The European Commission has until February 14 to decide whether to block the acquisition.

Matt Schruers, president of the tech lobbying group Computer and Communications Industry Association, is skeptical about the EU’s reported decision, arguing to Reuters that blocking the deal goes against the intention to increase competition and instead “may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug.”

iRobot stock tumbles on report that the EU may block Amazon’s acquisition of Roomba maker

Privacy advocates had worried about what Amazon might do with iRobot’s data; some Roomba models can make detailed maps of people’s houses.

Fast Company – technology

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