A Roomba robot vacuum cleaner manufactured by iRobot is displayed on a shelf at a Target store in San Rafael, California, on August 5, 2022.
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shares of i robot It plunged 19% on Monday after the EU’s antitrust watchdog issued a warning: Amazon‘s $1.7 billion acquisition plan for the Roomba maker has raised competitive concerns.
european commission A thorough investigation has begun. The acquisition will take place in July, with a decision on the deal expected to be made by February 14th. The commission said in a statement Monday: Said The company informed Amazon of its “preliminary view that its proposed acquisition of iRobot may restrict competition in the robot vacuum market.”
An Amazon spokesperson told CNBC in a statement that the company will continue to work with the commission to address the concerns identified in the investigation.
“In the face of intense competition from other vacuum cleaner suppliers, iRobot offers practical and original products,” the spokesperson said. “We believe Amazon can provide companies like iRobot with the resources to accelerate innovation and invest in critical capabilities while lowering prices for consumers.”
Following the announcement, iRobot stock temporarily halted trading early Monday afternoon. Amazon shares rose about 1.4%.
The transaction is also being reviewed by the US Federal Trade Commission. The UK Competition and Markets Authority said in June that the deal would not result in a “significant reduction in competition” in the UK.
Amazon announced its intention to acquire iRobot in August 2022 for $61 per share in an all-cash transaction.
The commission’s announcement comes after Reuters reported on Friday that the deal was expected to “obtain unconditional EU antitrust approval,” citing three people familiar with the matter. The move comes after iRobot stock soared 39%. An EU spokesperson declined to comment.
In Monday’s update, the commission said Amazon has increased the number of iRobot competitors’ online sites by excluding or reducing the visibility of its products in prominent areas such as search results. It said it was found that it may have the ability to block access or lower ratings. “More Favorite Products” section of the list.
Officials said Amazon may have an incentive to “eliminate iRobot’s competitors because of the potential economic benefits.”
