Cliff sensors won’t save you now… After backlash from US and EU antitrust regulators, Amazon abandoned its $1.4B purchase of Roomba maker iRobot. The deal, announced in 2022, would’ve been Amazon’s fourth-largest acquisition. After the news, iRobot said it would lay off nearly a third of its staff, and the stock was down 60% in the past month. It’s just the latest deal to get clogged by antitrust scrutiny as big tech companies struggle to vacuum up smaller players. Amazon may’ve been preempting what it saw as a losing game:
Warning lights: Along with a looming EU veto, the FTC had reportedly planned to sue to block the iRobot deal. Regulators were concerned by Amazon’s potential to shut out robo-vacuum rivals through its online storefront.
Clean break: Amazon, which has to pay iRobot a $94M termination fee, has a silver lining in the failed acquisition: it won’t acquire iRobot’s recent losses ($500M since mid-2021).
Swingin’ and missin’ at checkout… isn’t typical for Amazon. iRobot would’ve joined Amazon’s connected-home product line, which the company’s built up over the past decade through acquisitions of camera co Blink, security co Ring, and WiFi co Eero. Not to mention other big buys like Whole Foods, MGM, and One Medical. Now Lina Khan’s FTC and the Biden admin have created a harsher M&A environment for the tech industry.
Antitrust is tired of tech picking unripened fruit… Global watchdogs have grown increasingly wary of “killer acquisitions” (deals where a company absorbs a potential competitor). The environment is far from the one that let Facebook snag Instagram about a decade ago. Amid regulatory scrutiny, last month Adobe bailed on a $20B acquisition of Figma; last year Meta sold Giphy for a $260M loss; and in 2022 Nvidia ditched plans to buy chip rival Arm.