European Union Anticipated to Strike Down Amazon and iRobot Merger
The European Union’s competition watchdog is geared up to deny Amazon.com Inc‘s audacious $1.7-billion takeover bid of iRobot Corporation, the renowned company behind the Roomba vacuum cleaners, as reported by The Wall Street Journal. This verdict serves as a potential stumbling block for one of Amazon’s significant expansion endeavors. Following this revelation, iRobot’s stock witnessed a staggering plummet of over 40% during after-hours trading, on the heels of a 14.23% dip in the regular session.
EU Competition Commission and Amazon at an Impasse
During a recent encounter between Amazon representatives and officials from the European Commission, the EU’s governing body, Amazon was apprised of the probable snub concerning their pursuit to acquire iRobot. The final seal of approval rests in the hands of the commission’s 27 top political leaders. The likelihood of these leaders overturning a recommendation from the competition commissioner, Margrethe Vestager, as per the WSJ, is slim. The commission is anticipated to furnish its conclusive decision by Feb. 14.
Amazon’s Missed Opportunity and iRobot’s Plunge
Notably, Amazon still holds the option to withdraw from the deal, which was initially reached in August 2022. The commission had previously voiced concerns in November, citing the potential competition constraints in the robotic vacuum cleaner market posed by the acquisition. Amazon’s failure to propose solutions to address these apprehensions further complicates the situation. The Journal reports that the company failed to meet a critical deadline last week for presenting these remedies to the commission.
iRobot Sheds Over 40% in After-Hours Trading
As a result of these revelations, shares of iRobot nosedived by 40.39% to $14.08 in after-hours trading on Thursday. This turn of events is poised to have significant implications for both Amazon and iRobot, as they navigate the fallout of this potential rejection.
