It’s been 17 months since Amazon and iRobot struck a deal worth $1.7 billion. The following year and a half has passed at an arduous pace, dragging along as the acquisition inches forward. Industry experts forecasted that the retail behemoth’s purchase of the pioneering home robot company would face rigorous regulatory scrutiny, but few imagined it would bumble along for this long.
The latest obstacle in this acquisition saga is the European Commission, setting a deadline of February 14 for a final decision to be made. Reports indicate that the EU regulatory body is poised to vote against the acquisition, citing concerns about its potential to create anti-competitive circumstances. Last week, Amazon failed to meet a deadline for submitting concessions to the European Commission.
The Wall Street Journal reported that Amazon was informed of the Commission’s intentions during a recent meeting. The acquisition has already navigated through various regulatory hurdles, including the approval of the equivalent body in the United Kingdom.
Since the deal was first announced, Amazon has maintained that it will not negatively impact the market for robot vacuums. Regulators have also been assured that the retail giant’s immense presence will not unfairly favor iRobot’s products over its competitors.
The extended review process has put iRobot’s resilience to the test. In July, Amazon declared a price reduction from $61 per share to $51.75. Around the same time, the maker of the Roomba obtained $200 million in debt to keep the company running while waiting for the deal’s closure. If the acquisition does eventually go through, the debts will be transferred to the new parent company.
On the day the acquisition was initially announced, iRobot reduced its workforce by 10% – approximately 140 employees – as part of a restructuring effort. Just last February, they laid off another 85 workers. Additionally, the company’s stock price has continued to suffer due to the delayed deal. As of now, the share prices have plummeted below $20 – only one-third of their value when the acquisition plans were initially made.
