Amazon lowers price for Roomba maker iRobot after deal faces antitrust scrutiny
Regulators are concerned the deal 'would allow Amazon to restrict competition in the market for robot vacuum cleaners'
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Amazon Inc. lowered the price it's paying to acquire iRobot, the company behind the Roomba vacuum, as the companies face scrutiny from with U.S. and European antitrust regulators.
Under the amended terms of the agreement, announced Tuesday, the Seattle-based tech giant will pay a revised $51.75 per share to acquire the company and bolster its position in the smart home market.
When the companies first announced the acquisition in August 2022, Amazon agreed to $61 per share in an all-cash transaction valued at approximately $1.7 billion, including iRobot's net debt.
The deal is now reportedly valued at $1.42 billon after it was amended.
AMAZON BUYS ROOMBA MAKER IROBOT IN $1.7B DEAL, ITS NEWEST EXPANSION INTO HOME DEVICES
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 210.71 | +2.82 | +1.36% |
| IRBT | IROBOT CORP. | 8.15 | +0.54 | +7.10% |
Amazon said the price change per share will be "largely offset" by the planned increase in iRobot's net debt under its new $200 million financing facility, which the company entered into to fund its ongoing operations, according to the joint announcement.
iRobot vacuum cleaners at a Target superstore (Alex Tai/SOPA Images/LightRocket via Getty Images / Getty Images)
Shares of iRobot fell on the news during midday trading Tuesday.
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Last month, the Competition and Markets Authority, British antitrust regulators, cleared Amazon’s purchase of the robot vacuum after looking into whether the deal would result in a "substantial lessening of competition" within the United Kingdom.
However, the deal still faces scrutiny in the United States and Europe.
This picture taken July 4, 2022, shows packed products at Amazon's Amagasaki Fulfillment Center in Amagasaki, Hyogo prefecture. (Kazuhiro Nogi/AFP via Getty Images / Getty Images)
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Earlier this month, the European Commission announced it had opened an in-depth investigation to assess the deal, saying it's "concerned that the transaction would allow Amazon to restrict competition in the market for robot vacuum cleaners and to strengthen its position as online marketplace provider."
The acquisition was already under review by the Federal Trade Commission (FTC), which was also worried about Amazon’s growing market power.
Some observers even called on regulators to halt the deal.
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Shortly after the deal was announced, Ron Knox, a senior researcher at the Institute for Local Self Reliance, said it was the "most dangerous, threatening" acquisition in the e-commerce behemoth's history, FOX Business previously reported.
Amazon said in a statement that both companies "are working cooperatively with the relevant regulators in their review of the merger."
The Associated Press contributed to this report.
