Throughout its history,Amazonhas made several acquisitions while evolving into one of the largest companies in the world. Whole Foods, Twitch, and Audible are just a few examples of some of the entities Amazon has gobbled up along the way. For more than a year, the company has been working on acquiring iRobot, the smart robot vacuum business. After facing scrutiny from regulatory bodies at home and abroad, however, both Amazon and iRobot are pivoting.
Amazon and iRobothave announced that they are abandoning their acquisition agreement, which was originally signed by both parties in August 2022. The online retailer claimed that the deal would’ve allowed it to reduce iRobot product costs while furthering innovation. Amazon SVP David Zapolsky said in a statement that the acquisition could have helped iRobot’s products better compete in the already saturated market. After facing significant headwinds from legislators in the US and EU, Amazon and iRobot scrapped the deal they had drafted — both companies have since signed a termination agreement.
Shortly after Amazon and iRobot announced their intent to team up in 2022, the companies were targeted by concerned legislators. The Federal Trade Commission (FTC) immediatelysought more informationfrom iRobot and Amazon on their looming deal to examine potential anti-competitive practices. While it didn’t result in an end to the acquisition plans, it put pressure on both companies as they moved forward.
In 2023, the European Commission (EC) released a statement detailing its own concerns surrounding the acquisition. At the time, the deal was estimated to be worth $1.7 billion. The EC launched a full investigation into the companies’ plans in July 2023 to determinehow it could impact the industryin its entirety. One of the concerns was that the acquisition would hinder competitors’ efforts to sell similar products on the market. The EC was set to make a final decision on the acquisition in February 2024. Now that the deal has been squashed, however, there will be no need to proceed.
Amazon and iRobot claim that the termination of their acquisition agreement will ultimately hurt consumers by limiting collaborative efforts. Together, the companies believed that they could have furthered iRobot’s innovative efforts and developed more beneficial products for its customers. The impact on the industry as a whole, however, could have had devastating implications. Legislators’ concerns surrounding the restriction of competition were not unfounded. As Amazon continues to expand and look for more companies to acquire, this likely won’t be the last time it faces scrutiny from regulators. Whether this changes its approach to mergers and acquisitions in the future has yet to be seen.
