Amazon abandons its $1.4 billion deal with iRobot, a company that makes home cleaning robots, after the European Union showed itself ready to block the transaction in the wake of competition concerns.
The renunciation of the retail giant sinks iRobot, which ends up losing up to 18% on Wall Street and is forced to announce a major restructuring with the cutting of 31% of its employees and the replacement of its CEO.
“We are disappointed that the iRobot acquisition cannot proceed. This will deny consumers faster innovation and more competitive pricing,” says David Zapolsky, vice president of Amazon.
The European Commission informed Amazon of its preliminary opinion on the deal last November, noting that the iRobot acquisition could limit competition in the robot vacuum cleaner market.
The wedding has also raised concerns in the United States, where Federal Trade Commission staff warned Amazon last week about the operation, explaining that they were inclined to block it.
With Amazon's step backwards, iRobot is forced to launch a restructuring that involves the dismissal of 350 employees and the replacement of CEO Colin Angle.
The company "will do better with a new leader who has experience in reorganizations," said Angle whose role will be taken on an interim basis by Glen Weinstein.
“Our focus now is on the future,” added Andrew Miller, the president of iRobot.
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