Roomba maker iRobot's shares plunge on report Amazon deal faces EU block
Technology
Amazon disclosed plans to buy the robot vacuum company in August 2022
(Reuters) - IRobot (IRBT.O), opens new tab shares slumped 36% in premarket trading on Friday after a report the European Union antitrust regulator was planning to block Amazon.com's (AMZN.O), opens new tab $1.4 billion buyout of the Roomba vacuum maker.
Amazon was informed during its meeting on Thursday with the European Commission, the EU's executive arm, that the deal was likely to be rejected, the Wall Street Journal reported.
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.
Amazon disclosed plans to buy the robot vacuum company in August 2022 to add to its portfolio of smart devices, which include the Alexa voice assistant, smart thermostats, security devices and wall-mounted smart displays.
Any likely block will make it the second tech deal to hit regulatory hurdles in recent weeks. Adobe (ADBE.O), opens new tab in December scrapped its $20 billion deal for design software maker Figma, citing "no clear path" for antitrust approvals in Europe and the UK.
Regulators are worried that the acquisition of smaller rivals will result in a few companies accessing large pools of customer data and controlling the market.
Amazon had in July slashed its offer by about 15% after iRobot incurred fresh debt.
That month, the EU also warned Amazon the deal, cleared by UK regulators, could reduce competition in the market.
IRobot's shares have fallen 53% since the deal was announced.
The European Commission has until Feb. 14 to either approve or reject the deal.
