iRobot and Amazon Terminate Merger Agreement

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Shares of iRobot took a significant hit on Monday following the joint announcement by the smart vacuum company and that their merger agreement had been terminated due to regulatory roadblocks.

Last week, The Wall Street Journal reported that the European Commission informed Amazon during a meeting that their planned $1.4 billion deal with iRobot was likely to be rejected. The regulators argued that this acquisition would impede competition in the market for robotic vacuum cleaners.

In a statement, both companies expressed their disappointment with the situation, stating, “Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation.”

In addition to this setback, iRobot took further action on Monday by announcing a restructuring plan. As part of this plan, the company will be reducing its staff by 31%, and Chairman and Chief Executive Colin Angle will be stepping down.

The termination of the merger agreement took a toll on iRobot’s shares, causing them to tumble by 18% to $13.99. On the other hand, Amazon’s shares experienced a slight increase of 0.4% to $159.79.

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