Amazon Backs Out of iRobot Acquisition

This deal just sucked the air out of the room. 

On Monday, Amazon announced that it’s calling off its $1.4 billion plan to acquire autonomous vacuum maker iRobot, citing “no path to regulatory approval for the deal” in light of steep antitrust scrutiny. 

The Roomba Where it Happens

The antitrust case against Amazon’s acquisition is pretty simple: Should the tech giant scoop up the Roomba-maker, it could then turn around and unfairly promote its products over competitors on its e-commerce marketplace — a maneuver the company has been accused of many times over the years. Concerns have also been raised that a potential pairing of iRobot and Amazon’s Alexa devices could lead to too much consolidation in the home smart devices industry. 

Earlier this month, The Wall Street Journal reported that the concerns were grave enough for the European Commission to block the deal. And on Monday, Bloomberg reported that the FTC told Amazon representatives in a meeting last week that they were recommending a lawsuit over the deal.

Amazon took the hint — leaving iRobot, like one of its confused vacuums, stuck in a corner:

• Upon news of the squashed deal, iRobot CEO Colin Angle announced he would resign effective immediately, as the company moves toward a restructuring plan that includes laying off 350 workers, or about 31% of its workforce.
• The company, which went public in 2005, had been profitable for years before a pandemic-era glow-up-and-comedown. Losses have totaled $500 million since 2021’s second quarter, and last year the company reported an adjusted operating loss of around $200 million.

Busted: Major deals are struggling in this new era of antitrust scrutiny. Earlier this month, JetBlue and Spirit announced their planned merger would not achieve lift-off — sending Spirit into a similar pattern of layoffs and restructuring seen by iRobot. In December, Adobe walked away from its $20 billion acquisition of Photoshop competitor Figma. But next may be the real trust-busting blockbuster: The FTC opened a probe late last week into the cozy relationship between tech giants and ascendent artificial intelligence firms, sending out letters of inquiry to Alphabet, Amazon, Microsoft, Anthropic, and OpenAI. It appears the agency has its eyes on Big Tech’s AI ambitions — be it chatbots or vacuum cleaners.