iRobot shares plunge 19% after EU warns Amazon deal ‘may restrict competition’

iRobot’s Roomba.

Source: iRobot

Shares of iRobot plunged as much as 19% on Monday after the EU’s antitrust watchdog issued a warning that Amazon‘s planned $1.7 billion acquisition of the Roomba maker raises competition concerns.

The European Commission opened an in-depth probe into the purchase in July, and is expected to rule on the deal by Feb. 14. In a statement Monday, the commission said it has informed Amazon of its “preliminary view that its proposed acquisition of iRobot may restrict competition in the market for robot vacuum cleaners.”

Representatives from Amazon didn’t immediately respond to a request for comment. iRobot shares were briefly halted earlier Monday afternoon following the announcement. Amazon shares were up about 1.4%.

The deal is also under review by the U.S. Federal Trade Commission. The U.K.’s Competition and Markets Authority said in June the deal would not result in “a substantial lessening of competition” in the U.K.

Amazon announced its intention to acquire iRobot in August 2022 for $61 a share in an all-cash deal.

The commission’s announcement comes after iRobot shares rocketed 39% on Friday after Reuters reported the deal is set to “win unconditional EU antitrust approval,” citing three sources familiar with the matter. An EU spokesperson declined to comment.

In its update Monday, the commission said it found that Amazon may have the ability to prevent or degrade iRobot rivals’ access to its online site by delisting or reducing the visibility of their products in search results, or in other highly visible areas such as the “other products you may like” section on a listing.

Officials said Amazon may have the incentive to “foreclose iRobot’s rivals because it may be economically profitable to do so.”

Originally posted 2023-11-27 18:44:45.