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Friday, June 21, 2024

iRobot Shares Plunge 36% as EU Signals Block on Amazon’s Roomba Deal

Shares of iRobot took a nosedive, plummeting more than 36% in pre-market trading on Friday. This steep decline follows reports that the European Union’s antitrust watchdog is poised to reject Amazon’s planned acquisition of the popular Roomba vacuum maker.

EU Antitrust Watchdog’s Stand

The Wall Street Journal revealed that the European Commission held discussions with Amazon representatives on Thursday regarding the proposed acquisition. According to sources familiar with the matter, the Commission is inclined to reject the deal, citing potential antitrust concerns.

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Amazon’s Response and European Commission’s Silence

Amazon, in response to the reports, chose not to comment on the unfolding situation. On the other hand, the European Commission has yet to provide an official statement or response to inquiries about the reported discussions.

Amazon’s Stock Movement

Despite the setback for iRobot, Amazon’s stock experienced only slight gains in pre-market trading.

Background on the Acquisition

Amazon had initially announced its intention to acquire iRobot in August 2022 for $61 per share, valuing the smart vacuum maker at $1.7 billion in an all-cash deal.

EU Commission’s Concerns

Last July, the European Commission, the EU’s top antitrust enforcer, launched an in-depth probe into the acquisition. The Commission expressed concerns about potential competition issues, suggesting that Amazon could impede iRobot’s competitors from effectively participating in its online marketplace. The fear is that Amazon might take actions such as delisting or reducing the visibility of rivals’ products in search results or other areas.

Expected Ruling and Lack of Concessions

The European Commission is anticipated to make a decision on the acquisition by February 14. Earlier reports from this month indicated that Amazon does not plan to offer concessions to address the Commission’s concerns.

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US and UK Perspectives

While the deal is still under review by the U.S. Federal Trade Commission, the U.K.’s Competition and Markets Authority stated in June that it did not foresee the acquisition leading to a “substantial lessening of competition” in the U.K.

The development adds further uncertainty to the future of this high-profile acquisition, with stakeholders closely watching the regulatory decisions on both sides of the Atlantic.

Timothy Hamilton
Timothy Hamilton
Timothy Hamilton covers business news for our site. With over 10 years of experience in financial news, he holds an MBA from the University of Alaska. He has worked as a web developer, software engineer, and product manager, and has extensive stock market knowledge.

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