Amazon has ended its bid to acquire iRobot, the manufacturer of robot vacuum cleaners, after running into serious difficulties with European regulators.
In a press release, the companies said they see “no path to regulatory approval in the European Union” that would prevent them from moving forward. Amazon and iRobot have mutually agreed to terminate their previously announced acquisition deal, under which Amazon reportedly purchased iRobot for approximately $1.7 billion in cash.
“We are disappointed that Amazon’s acquisition of iRobot was not able to proceed,” David Zapolsky, Amazon’s executive vice president and general counsel, said in a press release. “We believe in the future of consumer robotics in the home and have always been fans of iRobot products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we are deeply grateful to everyone who worked tirelessly to try to make this collaboration a reality.
iRobot will receive a $94 million termination fee from Amazon following the rejected offer. But the canceled acquisition will also require an “operational restructuring plan,” iRobot says, involving laying off about 350 iRobot employees, or about 31% of the company’s workforce, by the end of March.
Colin Angle, iRobot’s chairman and CEO, has resigned as chairman and CEO, and Glen Weinstein, iRobot’s executive vice president and general counsel, has been named interim CEO. Andrew Miller, lead independent director on iRobot’s board, was named chairman of the board, and iRobot hired “turnaround expert,” Jeff Engel, to lead implementation of the restructuring.
“iRobot is a powerful company and its mission remains to change the world by empowering people to achieve more,” Angle said in a LinkedIn post. “It is the home of talented builders, optimism, possibilities, unbridled determination and resilience. To those with whom I shared this journey, I will be forever grateful. I look forward to serving as a senior advisor and remaining a board member through the end of my current term.
iRobot aims to save between $80 million and $100 million through renewed agreements with manufacturing partners on more attractive terms; $20 million through increased offshoring; and $30 million by consolidating its sales and marketing expenses. The company also plans to reduce its real estate footprint and suspend all work related to “non-land care innovations,” including air purification, robotic lawn mowing and education.
iRobot expects the restructuring to cost between $12 million and $13 million, mostly in severance costs related to layoffs, over the first two quarters of 2024, with the majority expected in the first quarter.
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