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Amazon scraps plans to acquire Roomba-maker iRobot

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iRobot Roomba

Is Roomba in trouble?

On Monday, Amazon announced it would be scrapping its plans to acquire iRobot, the consumer home electronics company best known for its line of robotic vacuum cleaners.

The e-commerce giant's decision to back out of its previously announced $1.7 billion acquisition is due to pushback from regulators in the European Union. However, the company also faced challenges with the FTC in the U.S. regarding the deal. 

Mashable had previously reported on the concerns surrounding user privacy violations. Amazon's deal with iRobot made it clear that an Alexa voice assistant integration feature would be a major feature in an Amazon-owned Roomba. Regulators were concerned about the potential for Amazon to obtain data on users' homes with this technology. 

SEE ALSO: Amazon vacuums up Roomba maker iRobot, sparking immediate privacy concerns

In addition, there were antitrust issues. Regulators worried that Amazon would be able to push out competition within the smart home market. For example, it would be difficult for Roomba competitors to compete on Amazon if the company was able to promote its own line of smart robot vacuums over others in its marketplace.

Bad news for iRobot

Amazon will be fine after the termination of this deal. However, the same cannot be said for iRobot. When Amazon first announced its intention to acquire the Roomba-maker in August 2022, it was seen as somewhat of a bailout for iRobot. (After Amazon's original $1.7 billion offer, the company lowered its purchase price to $1.4 billion after iRobot took on additional debt.)

iRobot has been struggling post-pandemic. Roomba's saw a sudden and sharp spike in popularity amid the 2020 COVID-19 lockdowns. With so many people staying home, there was a boom within the home appliance industry.

As Bloomberg points out in its report, iRobot has been profitable since its 2005 IPO. However, in iRobot's press release following Amazon's cancellation of the deal, it says the company is expecting a 2023 fourth-quarter operating loss between "$265 and $285 million."

And that's not the only unfortunate news coming out of iRobot following Amazon's decision to walk away from the deal.

SEE ALSO: The best robot vacuums unveiled at CES 2024 go where Roombas still haven't

iRobot announced it would be cutting 350 jobs, or around 31 percent of its workforce, as part of its restructuring plan. In addition, iRobot co-founder and CEO Colin Angle announced he'd be stepping down from his role with the company.

Following the news, iRobot's stock tanked to its lowest price since 2009.

It's unclear what the future holds for iRobot. The company is far and away the global leader in the robot vacuum space. However, its market share has declined over the years as competition heats up in the industry.



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