Following a recent announcement that Amazon and iRobot have terminated their $1.4 billion merger agreement, the Federal Trade Commission (FTC) Associate Director for Merger Analysis Nathan Soderstrom released a statement expressing the Biden regulators’ pleasure at the dissolution.
“We are pleased that Amazon and iRobot have abandoned their proposed transaction…The Commission’s investigation revealed significant concerns about the transaction’s potential competitive effects,” Soderstrom said in the statement.
Statement regarding the termination of Amazon’s proposed acquisition of iRobot: https://t.co/njnwKHOS7P
— FTC (@FTC) February 1, 2024
U.S. federal lawmakers, including Massachusetts Senator Elizabeth Warren, previously called on the FTC to block the merger in a joint letter.
“iRobot is a powerful market incumbent, and Amazon, given its vast resources, history of producing smart vacuums…and powerful platform, is an extraordinarily significant ‘potential entrant’ into the market: Amazon’s ability to acquire iRobot would cause substantially less competition,” the lawmakers wrote. (RELATED: Biden Admin Launches Probe Into Major Investments Pouring Into Pioneering Tech Start-Ups)
The companies attributed the FTC’s opposition to the European Union (EU) in a press release, saying that “Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the [EU] preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation.” iRobot, who primarily manufactures vacuums, disclosed that as a result of the merger block they are forced to lay off approximately 350 employees (31% of the company’s workforce).
On Monday Amazon responded to the merger’s termination.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel. “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 that regulators say they’re trying to protect.”