Amazon calls off $1.7 billion iRobot buy, blames regulators
(2024/01/29)
- Reference: 1706542385
- News link: https://www.theregister.co.uk/2024/01/29/amazons_irobot_deal_off/
- Source link:
Amazon's $1.7 billion bid to buy iRobot is off, and while Jeff Bezos's business faces a termination fee, almost a third of vacuum maker's staff face termination of an altogether different nature.
Amazon SVP and general counsel David Zapolsky wasted no time pointing the finger at regulators, whom he said were discouraging to plucky entrepreneurs like Amazon.
Zapolsky [1]said : "Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition — the very things that regulators say they're trying to protect."
[2]
Following the termination of the deal, iRobot [3]announced restructuring plans aimed at generating between $80 million and $100 million of savings and cutting R&D expenses by approximately $20 million year on year. The company said around 350 employees would be leaving, representing about 31 percent of the workforce as it stood on December 30, 2023. The company has appointed Jeff Engel as Chief Restructuring Officer to oversee the changes.
[4]
[5]
iRobot's CEO, Colin Angle, is also stepping down with immediate effect.
In July 2023, the European Commission [6]launched an in-depth investigation into the $1.7 billion takeover, citing competition concerns. The deal itself was first [7]announced in 2022.
[8]
iRobot, which makes the Roomba vacuum cleaner, has been having a torrid time of it in recent years as revenue plummeted. In November 2023, it [9]announced revenue for the third quarter of 2023 of $182 million, compared to $278.2 million for the same period of the earlier year. It also entered into a $200 million financing facility "to fund its ongoing operations."
The robomaker will be paid a $94 million termination fee by Amazon, approximately 20 percent of which will go to its financial advisors.
[10]Amazon accused of being a monopolist in FTC lawsuit
[11]Amazon's robo vacuum power grab sucks EU attention
[12]This won't hurt a bit: Amazon now a US healthcare provider
[13]Amazon to buy Roomba maker iRobot for $1.7b
The European Commission has yet to comment on the development. However, Daniel Friedlaender, SVP and head of the Computer & Communications Industry Association Europe, expressed disappointment with the outcome and said: "The size or profitability of a company should not be used as an excuse by EU regulators to argue it cannot innovate in a completely different sector. In this case, for example, there are simply not valid reasons to prevent a firm from acquiring a struggling producer of domestic appliances.
"Europe cannot and should not create an environment where companies are not allowed to invest in, or acquire, companies in related sectors."
He added: "Neither competition law, nor the Digital Markets Act, should be used to artificially limit or restrict healthy markets or legitimate acquisitions." ®
Get our [14]Tech Resources
[1] https://press.aboutamazon.com/2024/1/amazon-and-irobot-agree-to-terminate-pending-acquisition
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://media.irobot.com/2024-01-29-iRobot-Announces-Operational-Restructuring-Plan-to-Position-Company-for-the-Future
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/07/07/europe_amazon_irobot_competition/
[7] https://www.theregister.com/2022/08/05/amazon_robot_ecommerce_giant_buys/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://media.irobot.com/2023-11-07-iRobot-Reports-Third-Quarter-2023-Financial-Results
[10] https://www.theregister.com/2023/09/26/ftc_amazon_antitrust/
[11] https://www.theregister.com/2023/07/07/europe_amazon_irobot_competition/
[12] https://www.theregister.com/2023/02/23/amazon_one_medical_merger/
[13] https://www.theregister.com/2022/08/05/amazon_robot_ecommerce_giant_buys/
[14] https://whitepapers.theregister.com/
Amazon SVP and general counsel David Zapolsky wasted no time pointing the finger at regulators, whom he said were discouraging to plucky entrepreneurs like Amazon.
Zapolsky [1]said : "Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition — the very things that regulators say they're trying to protect."
[2]
Following the termination of the deal, iRobot [3]announced restructuring plans aimed at generating between $80 million and $100 million of savings and cutting R&D expenses by approximately $20 million year on year. The company said around 350 employees would be leaving, representing about 31 percent of the workforce as it stood on December 30, 2023. The company has appointed Jeff Engel as Chief Restructuring Officer to oversee the changes.
[4]
[5]
iRobot's CEO, Colin Angle, is also stepping down with immediate effect.
In July 2023, the European Commission [6]launched an in-depth investigation into the $1.7 billion takeover, citing competition concerns. The deal itself was first [7]announced in 2022.
[8]
iRobot, which makes the Roomba vacuum cleaner, has been having a torrid time of it in recent years as revenue plummeted. In November 2023, it [9]announced revenue for the third quarter of 2023 of $182 million, compared to $278.2 million for the same period of the earlier year. It also entered into a $200 million financing facility "to fund its ongoing operations."
The robomaker will be paid a $94 million termination fee by Amazon, approximately 20 percent of which will go to its financial advisors.
[10]Amazon accused of being a monopolist in FTC lawsuit
[11]Amazon's robo vacuum power grab sucks EU attention
[12]This won't hurt a bit: Amazon now a US healthcare provider
[13]Amazon to buy Roomba maker iRobot for $1.7b
The European Commission has yet to comment on the development. However, Daniel Friedlaender, SVP and head of the Computer & Communications Industry Association Europe, expressed disappointment with the outcome and said: "The size or profitability of a company should not be used as an excuse by EU regulators to argue it cannot innovate in a completely different sector. In this case, for example, there are simply not valid reasons to prevent a firm from acquiring a struggling producer of domestic appliances.
"Europe cannot and should not create an environment where companies are not allowed to invest in, or acquire, companies in related sectors."
He added: "Neither competition law, nor the Digital Markets Act, should be used to artificially limit or restrict healthy markets or legitimate acquisitions." ®
Get our [14]Tech Resources
[1] https://press.aboutamazon.com/2024/1/amazon-and-irobot-agree-to-terminate-pending-acquisition
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://media.irobot.com/2024-01-29-iRobot-Announces-Operational-Restructuring-Plan-to-Position-Company-for-the-Future
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/07/07/europe_amazon_irobot_competition/
[7] https://www.theregister.com/2022/08/05/amazon_robot_ecommerce_giant_buys/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbfZvBFYancHB1hCMqrVGAAAAIw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://media.irobot.com/2023-11-07-iRobot-Reports-Third-Quarter-2023-Financial-Results
[10] https://www.theregister.com/2023/09/26/ftc_amazon_antitrust/
[11] https://www.theregister.com/2023/07/07/europe_amazon_irobot_competition/
[12] https://www.theregister.com/2023/02/23/amazon_one_medical_merger/
[13] https://www.theregister.com/2022/08/05/amazon_robot_ecommerce_giant_buys/
[14] https://whitepapers.theregister.com/
KarMann
I also like the unstated assumption implied, that these are definitely healthy markets and a legitimate acquisition. Circular logic/begging the question much?
A completely different sector
abend0c4
I thought the suspicion was that Amazon's interest was to make the business part of its existing surveillance sector and use the device primarily to hoover up the sensor data.
"Europe cannot and should not create an environment where companies are not allowed to invest in, or acquire, companies in related sectors."
He added: "Neither competition law, nor the Digital Markets Act, should be used to artificially limit or restrict healthy markets or legitimate acquisitions."
This is exactly what proper regulators should do. I just wish we had such regulators here in the US!