iRobot, synonymous with its Roomba vacuum cleaner, witnessed a 17% dip in shares as the European Union’s antitrust regulator issued a warning concerning Amazon’s proposed $1.7 billion acquisition. The European Commission, currently conducting an extensive inquiry into the deal initiated in July, is set to deliver its verdict by February 14, expressing preliminary concerns about potential competition constraints in the robot vacuum cleaner market.
The commission communicated its apprehensions to Amazon, stating that the acquisition of iRobot could potentially limit competition in the market. In response, an Amazon spokesperson informed CNBC that the company is actively collaborating with the commission to address the identified issues.
iRobot, facing stiff competition in the vacuum cleaner sector, is known for its innovative and practical product line, notably the Roomba series. The potential acquisition by Amazon has been defended by the tech giant, asserting that it can provide iRobot with the resources needed to expedite innovation, invest in critical features, and simultaneously lower prices for consumers.
Following the announcement, iRobot shares experienced a brief stall, reflecting the uncertainty triggered by the antitrust warning. Conversely, Amazon shares managed a modest 1.4% increase on Monday afternoon.
Amazon initially unveiled its intent to acquire iRobot in August 2022 at a price of $61 per share. The agreement is also undergoing scrutiny by the U.S. Federal Trade Commission. Interestingly, the UK’s Competition and Markets Authority, in a statement from June, expressed that the deal was unlikely to result in a “substantial lessening of competition” in the UK. As the European Commission continues its investigation, the outcome holds significant implications for both companies and the broader landscape of the robot vacuum cleaner market.
