Amazon calls off purchase of iRobot, maker of the Roomba

Amazon and iRobot announced this Monday that their purchase agreement had been called off. Following the cancelation of the deal, the parent company of the Roomba automatic vacuum cleaner announced the dismissal of 31% of its workforce.

According to Amazon, one of the reasons why the agreement was not completed are the requirements imposed by regulatory bodies in both the United States and the European Union. In both places, Amazon's proposed operation came under heavy scrutiny from authorities. For this reason, both companies were disappointed by the outcome of the negotiation.

"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," said David Zapolsky, general counsel for Amazon, in statements to the AP.

European Union authorities maintain that the purchase could be considered a monopolistic practice. A similar position was taken by the Federal Trade Commission. Only British authorities approved the purchase.

The potential purchase agreement came to light in 2022 and at that time was estimated at $1.7 billion, before the deal was revalued 15% downward due to debts incurred by iRobot. The company will now only see a payment as a result of the termination of the purchase, though the amount was not made public.

That small percentage will not prevent the company from having to make severe personnel cuts that will amount to almost a third of iRobot's workforce. Among those leaving is CEO Colin Angle. He will be replaced by Glen Weinstein, currently serving as executive vice president, as iRobot now faces internal reconstruction.