The European Union’s competition watchdog is poised to reject Amazon.com Inc‘s AMZN ambitious $1.7-billion acquisition of iRobot Corporation IRBT, the company known for its Roomba vacuum cleaners.
This decision marks a potential halt to one of Amazon’s major expansion moves, The Wall Street Journal reports Thursday, citing sources close to the matter. The news sent iRobot stock plunging more than 40% in after-hours trading after a 14.23% drop in the regular session.
During a recent meeting between Amazon representatives and officials from the European Commission, the EU’s executive arm, Amazon was informed of the likely rejection of their bid to acquire iRobot.
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For the decision to become official, it must gain the endorsement of the commission’s 27 top political leaders. It’s rare for these leaders to overturn a recommendation from the competition commissioner, Margrethe Vestager. According to the WSJ, the commission is expected to make its final decision by Feb. 14.
While the European Commission has not yet commented on these developments, Amazon retains the option to withdraw from the deal, which was initially agreed upon in August 2022. The commission had previously expressed concerns in November, suggesting that the acquisition could potentially limit competition in the robotic vacuum cleaner market.
Amazon’s failure to submit proposed remedies to address these concerns further complicates the situation. The Journal reports the company missed a crucial deadline last week to present these solutions to the commission.
IRBT Price Check: Shares of iRobot were down 40.39% to $14.08 in after-hours trading Thursday.
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