Roomba maker iRobot’s shares plunge on report Amazon deal faces EU block By Reuters

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<span>© Reuters. FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron/File Photo</span><br />
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<p>(Reuters) -IRobot shares slumped more than 30% in early trading on Friday after reports that the European Union antitrust regulator was planning to block Amazon.com (NASDAQ:)’s $1.4 billion buyout of the Roomba vacuum maker.</p>
<p>Reuters reported, citing sources, that the agency was considering a veto on the deal, a move that could raise the bar for future Amazon acquisitions of online rivals. The news was first reported by the Wall Street Journal.</p>
<p>The U.S. tech giant did not offer remedies until a Jan. 10 deadline to address the regulator’s concerns the deal could reduce competition and reinforce Amazon’s e-commerce platform dominance.</p>
<p>Amazon agreed to buy iRobot (NASDAQ:) in August 2022 to beef up its portfolio of smart devices such as the Alexa voice assistant, smart thermostats, security devices and wall-mounted smart displays.</p>
<p>The potential blocking of the deal could weigh on iRobot’s prospects as a standalone company, analysts said.</p>
<p>“Regulators have little concern for iRobot’s health and financial outlook,” said Gil Luria, analyst at D.A. Davidson &amp; Co.</p>
<p>“They believe they are preventing harm to consumers by not allowing big technology companies to acquire businesses and make those categories less competitive.”</p>
<p>Meanwhile, a likely rejection would make it the second tech deal to hit regulatory hurdles in recent weeks. Adobe (NASDAQ:) in December scrapped its $20 billion deal for design software maker Figma, citing “no clear path” for antitrust approvals in Europe and the UK.</p>
<p>Amazon in July slashed its offer by about 15% after iRobot incurred fresh debt. That month, the EU warned Amazon the deal, cleared by UK regulators, could reduce competition. </p>
<p>IRobot shares have lost more than 66% since the deal was announced. At $16.27, they are trading at less than a third of the $51.75-per-share amended price that Amazon has agreed to pay.</p>
<p>The European Commission has until Feb. 14 to either approve or reject the deal. </p>
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