iRobot Crashes To 2009 Lows, Lays Off 31% Of Staff After Regulators Force Termination Of Amazon Acquisition
iRobot shares have been falling over the past week as regulatory opposition has mounted to the previously announced acquisition by Amazon, but this morning IRBT is down over 30% - to its lowest since 2009 - after the two firms announced that they have entered into a mutual agreement to terminate their deal agreement, originally signed on August 4, 2022.
The companies released the following statements today about the decision:
"We're disappointed that Amazon's acquisition of iRobot could not proceed," said David Zapolsky, Amazon SVP and General Counsel.
"We're believers in the future of consumer robotics in the home and have always been fans of iRobot's products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we're deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality.
This outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable.
Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren't subject to the same regulatory requirements in fast-moving technology segments like robotics. Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition - the very things that regulators say they're trying to protect."
Amazon will pay iRobot a $94 million termination fee.
"iRobot is an innovation pioneer with a clear vision to make consumer robots a reality," said Colin Angle, Founder of iRobot.
"The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love."
Separately, iRobot said it will implement an operational restructuring plan and cut about 31% of its workforce, or 350 employees.
As part of this workforce reduction, iRobot expects to record restructuring charges totaling between $12 million and $13 million, primarily for severance and related costs, over the first two quarters of 2024, with the majority of the restructuring charges anticipated in the first quarter of 2024.
iRobot CEO and Chair Colin Angle has stepped down with current iRobot EVP and Chief Legal Officer named interim CEO.