iRobot Corporation (NASDAQ: IRBT) shares plummeted almost 9% on Monday as Amazon scrapped plans to acquire the robot vacuum maker, citing regulatory challenges.
Amazon (NASDAQ: AMZN) has abandoned its plans to purchase iRobot (NASDAQ: IRBT), a consumer robot company.
Following the termination of the agreement, Amazon will compensate iRobot with a $94 million termination fee. Notably, regulatory complaints obstructed the progression of the deal.
Amazon Senior Vice President and General Counsel David Zapolsky said the following about this issue:
“Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things regulators say they’re trying to protect.”
Amazon had planned to acquire the maker of Roomba with a cash deal valued at $1.7 billion. The intention was to enhance investments in iRobot’s cleaning technology and expand its reach to a broader global consumer base.
iRobot is undergoing substantial changes in the aftermath of the terminated deal. This includes a workforce reduction of about 31%, with approximately 350 employees facing layoffs. In addition, Colin Angle, the Chairman and CEO, is resigning from his position.
iRobot (NASDAQ: IRBT) Stock Movement
IRBT stock plunged -8.77% on Monday. The traders had exchanged hands with 18,258,773(18.25 million) shares compared to the average daily trading volume of 1.60 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
