Amazon, iRobot abandon $1.4 billion merger deal

Amazon and robot vacuum maker iRobot are reportedly ending their plans to merge in the face of opposition from EU and U.S. antitrust regulators. iRobot announced a significant restructuring plan to reduce costs and said it would cut about 31 per cent of its workforce or 350 jobs. The company also said founder Colin Angle has stepped down as its CEO of the Roomba robot vacuum manufacturer.

The former CEO said given the current challenges, he and the board "mutually decided that iRobot will be better served by a new leader with turnaround experience."

Amazon said its proposed $1.4 billion acquisition of iRobot had no path to regulatory approval in the European Union. EU antitrust chief Margrethe Vestager said its in-depth investigation preliminarily showed "the acquisition of iRobot would have enabled Amazon to foreclose iRobot's rivals by restricting or degrading access to Amazon stores."

It was reported earlier this month by Reuters that the deal would be blocked by European Commission antitrust regulators and that its main concerns were that Amazon could restrict iRobot rivals on its online marketplace, especially in France, Germany, Italy, and Spain.

Vestager added that there are chances that Amazon could have delisted rival robot vacuum cleaners, reduce the visibility of rivals or raised costs of iRobot's rivals to advertise and sell their robot vacuum cleaners on Amazon's marketplace.

According to a source, the Federal Trade Commission was however poised to reject Amazon's deal before the companies announced they were abandoning it.