Following the news, iRobot shares dropped by 36% in premarket trading, reaching $15.01, while Amazon shares saw a 0.6% increase in value.
In August 2022, Amazon initially struck a deal to acquire iRobot at $61 per share, which was later reduced to $51.75 per share. The acquisition was intended to expand Amazon’s range of smart products, including its Alexa virtual assistant, Ring doorbells, and Smart thermostats.
The rejection of the deal by the European Commission did not come as a complete surprise. In November 2023, the commission issued a statement of objections to Amazon, expressing concerns over potential competition restrictions in the robotic vacuum cleaner market. Amazon did not propose any remedies in response to these concerns.
The track record of regulators in blocking major technology deals has been mixed in recent years. While Microsoft’s $69 billion acquisition of Activision Blizzard and Broadcom’s acquisition of VMware successfully completed last year despite regulatory hurdles, Adobe withdrew its $20 billion offer to acquire design-software company Figma in December due in part to objections from European regulators.