Amazon.com Inc. (AMZN) and Roomba parent iRobot Corp. (IRBT) announced on Monday that they are cancelling their planned acquisition agreement due to expected regulatory obstacles in the European Union.
Disappointment Over Failed Acquisition
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon senior vice president and general counsel. Zapolsky expressed his regret over the missed opportunity, stating that it would have resulted in faster innovation and more competitive prices for consumers, ultimately enhancing their lives.
Rejection by European Commission
According to a report by The Wall Street Journal in January, Amazon representatives had met with officials from the European Commission to discuss the potential deal. However, they were informed that the agreement would likely face rejection.
Financial Details of the Failed Deal
The initial announcement of the agreement was made in August, with Amazon planning to acquire iRobot by offering $61 in cash per share. This deal valued iRobot, known for its robotic cleaning products, at approximately $1.7 billion, including debt.
Negative Impact on iRobot's Stock
Following the termination of the acquisition agreement, iRobot's stock experienced a significant decline of 21% during early trading on Monday. Moreover, the stock has suffered a 56% decrease this year so far, whereas the S&P 500 has seen a 2.5% increase.
