Monday saw a 19% decline in iRobot shares following a warning from the EU’s antitrust agency about potential competition issues with Amazon’s proposed $1.7 billion acquisition of the Roomba producer.
In July, the European Commission initiated a thorough investigation of the purchase, and by February 14th, a decision is anticipated. Amazon has been advised by the commission that its proposed acquisition of iRobot may limit competition in the market for robot hoover cleaners, the agency said in a statement on Monday.
Amazon continues to collaborate with the commission to fix issues found during its investigation, an official from the business said CNBC in a statement.
The spokesman claimed that iRobot “offers useful and imaginative goods, but faces fierce competition from other hoover cleaner vendors.” “We think that by providing a firm like iRobot with the resources it needs to invest in essential features and drive innovation, Amazon can cut prices for consumers.”
In the aftermath of the announcement, iRobot shares were momentarily suspended earlier on Monday afternoon. 1.4% more Amazon shares were traded.
The Federal Trade Commission of the United States is also reviewing the deal. The merger won’t lead to “a considerable decrease of competition” in the United Kingdom, according to a June statement from the country’s Competition and Markets Authority.
August 2022 saw the announcement by Amazon that it would buy iRobot for $61 per share in an all-cash transaction.
The announcement from the commission comes after iRobot’s stock shot up 39% on Friday, following Reuters’ story that the merger is expected to “get unconditional EU antitrust approval,” citing three people with knowledge of the situation. An EU spokesman declined to provide a statement.
In an update released on Monday, the commission stated that it had discovered that Amazon might be able to delist or lessen the visibility of iRobot competitors’ products in search results or other prominent places, like the listing’s “other products you may like” section.
According to officials, Amazon might be motivated to “foreclose iRobot’s rivals because it might be economically lucrative to do so.”
Source (CNBC)
