Amazon and iRobot announced that a giant $1.4 billion deal to buy iRoomba robot vacuum cleaner is on hold because iRobot says the deal does not have regulatory approval in the European Union. iRobot also said it will lay off about 350 employees, or about 31 percent of its workforce, as part of the restructuring.
Colin Angle, chairman and CEO of iRobot, who founded the company in 1990, is stepping down from running the company. Glen Weinstein, the company’s current vice president and chief legal officer, will serve as interim CEO, and Andrew Miller, a former independent director of the board, will become chairman.
As part of the restructuring, iRobot is shutting down equipment outside its core floor cleaning product line, such as air cleaners and lawn mowers, and closing offices and facilities in smaller, underperforming geographies.
The collapse of the deal means Amazon will pay iRobot a $94 million termination fee, which will largely be used to pay off a $200 million loan it took out last year.
The announcement comes after the $1.4 billion acquisition ran into trouble with EU regulators. Last November, the European Commission said it believed the deal could limit competition in the robot vacuum cleaner market. Many of iRobot’s competitors also sell their devices on Amazon’s online store, and regulators were concerned that Amazon could delist or reduce the visibility of competing robot vacuums, limiting competition and leading to higher prices, lower quality and less innovation for consumers.
Amazon had until Jan. 10 to try to convince the European Commission to go through with the deal, but Politico reported that the deadline passed without Amazon making any concessions.
Source: The Verge
