iRobot announces major layoffs following canceled $1.4B Amazon deal

By Sanjeev 4 Min Read
iRobot Amazon Deal Called Off

Amazon has backed down from its planned acquisition of consumer robot manufacturer iRobot following opposition from EU regulators. This has caused a massive blow to the Roomba robot maker, which also announced layoffs.

The Initial Agreement

The two companies had previously agreed on a merger agreement under which Amazon would acquire iRobot for an estimated value of $1.7 Billion.

This was in August 2022.

But following delays caused by the European Commission, EU watchdog, the two companies agreed to adjust the price per share to reflect iRobot’s new $200 million financing in 2023.

They reduced the price from $61 on the initial agreement to $51.75 per share in July 2023, making the deal worth $1.4 billion.

Amazon steps back

And today, the two companies have called off the merger agreement, citing legal challenges from the EC. As a result, iRobot will receive $94 million from Amazon as a termination fee.

The company had received a green flag from the Competition and Markets Authority (UK) last year but saw now way past the Europen Union’s regulatory body.

Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.

David Zapolsky, Amazon SVP and General Counsel

The European Commission had been blocking the deal between Amazon and iRobot ever since it opened an in-depth official investigation in July 2023, having received knowledge about the acquisition deal a month ago.

The final decision was to be made on February 14, 2024.

Amazon had until January 10th to make its case to the European Commission in an attempt to secure approval for the deal.

European Commission Blocks Amazon iRobot Acquisition

However, it was reported that Amazon didn’t submit any concessions by the deadline.

Amazon was also facing a similar antitrust investigation in the United States which may have also contributed to the latest decision.

iRobot Announces Major Layoffs

Following the deal falling off, iRobot has announced major restructuring plans, including a major layoff, a change in management, and a trackback in the research plan.

The company’s share is now hit a 14-year low following the announcement.

Founder, Colin Angle has stepped down from his role as the Chairman of the Board of Directors and CEO.

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.

Colin Angle, Founder of iRobot

Andrew Miller has overtaken his role as the Chairman of the Board, whereas Executive Vice President and Chief Legal Officer Glen Weinstein serves as an interim CEO.

iRobot is also letting go of 350 employees that make up around 31% of its total workforce

Newly appointed Chief Restructuring Officer Jeff Engel will oversee all the new changes and will report directly to the Board and the interim CEO.

Tech Giants Vs Lawmakers

Amazon is the latest tech giant to back away from an acquisition deal due to regulators, following in the footsteps of Adobe and NVIDIA.

Last year, Adobe canceled its $20 billion purchase of Figma because of the antitrust issue in the UK.

Likewise, NVIDIA had abandoned ARM’s $40 billion takeover due to “significant regulatory challenges.”

On the other hand, some companies like Microsoft have successfully defended antitrust challenges in the US.

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