Shares of the tech company iRobot Corporation (NASDAQ:IRBT), which builds consumer robots, dropped nearly 20% on January 10. The decline came after Politico reported that the e-commerce giant Amazon (NASDAQ:AMZN) will not offer concessions to European antitrust regulators regarding its planned acquisition of iRobot. As Amazon is not making any changes to its business in Europe to appease regulators, there are growing apprehensions about the approval of the acquisition by the European Commission.
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In November 2023, the European Commission expressed concerns about the potential anti-competitive impact of the planned acquisition. The regulatory body highlighted that Amazon has the potential to restrict competitors of iRobot from accessing its online platform. Moreover, Amazon can delist or reduce the visibility of competing products in search results.
Why is iRobot Falling?
Amazon announced the acquisition of iRobot for $61 per share in August 2022. The all-cash deal valued iRobot at approximately $1.7 billion. However, IRBT stock has trended lower over the past year and currently sports a market cap of $829 million. Weak sales, heightened competition, and concerns regarding the regulatory approval of the AMZN deal took a toll on it.
Investors should note that the AMZN transaction is under review by the U.S. Federal Trade Commission. Moreover, the final deadline is February 14 for the European Commission to clear it.
