Amazon calls off its planned purchase of iRobot, which will now lay off 350 employees

Amazon and iRobot have mutually agreed to call off the planned acquisition of the robot vacuum company by the massive online retailer. The acquisition was first announced in August 2022, but the deal ran into some headwinds in 2023 from the European Union.

While there were rumors in late 2023 that the EU"s regulatory body, the European Commission, was going to approve the Amazon-iRobot deal, that turned out not to be correct. In November 2023 the EC posted a statement saying the "proposed acquisition of iRobot may restrict competition in the market for robot vacuum cleaners." Amazon"s planned purchase of iRobot was to be handled in a cash deal totaling $1.4 billion.

In its press release announcing the breakup of the deal, David Zapolsky, Amazon"s SVP and General Counsel, blasted the EC"s viewpoint, without actually naming the group. He is quoted as saying:

This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics.

Amazon will now pay a $94 million termination fee to iRobot now that the acquisition will no longer happen.

In its own press release, iRobot announced a major restructuring of its company. It will include laying off 350 team members, which represents 31 percent of its workforce. In addition, iRobot"s CEO and Chairman Colin Angle will depart the company. Glen Weinstein, the company"s chief legal officer, will take over as its interim CEO, and Andrew Miller, the lead independent director of the company"s Board, will take over as its new Chairman.

iRobot added it will now focus its business on its core products, like its robot vacuums, and will no longer work on non-floor care devices. That means it will no longer work on its robot lawnmowers, among other products.