Amazon, IRobot Agree To End Merger As No Path To Regulatory Approval In The EU

(RTTNews) - Amazon (AMZN) and iRobot (IRBT) have entered into a mutual agreement to terminate previously announced acquisition agreement, under which Amazon would have acquired iRobot. Under the terms of the merger agreement, Amazon will pay iRobot a $94 million termination fee.

David Zapolsky, Amazon SVP and General Counsel, said: "Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they're trying to protect."

Separately, iRobot Corporation said it will implement an operational restructuring plan designed to position the company for stabilization in the current environment. The actions will also result in a reduction of approximately 350 employees, which represents 31 percent of the workforce, with the majority of notifications taking place by March 30, 2024. iRobot expects to record restructuring charges totaling between $12 million and $13 million, over the first two quarters of 2024, with the majority of the restructuring charges anticipated in the first quarter of 2024.

Also, iRobot announced a leadership transition whereby Colin Angle has stepped down as Chairman and CEO. Glen Weinstein, Chief Legal Officer, has been appointed Interim CEO, and Andrew Miller, lead independent director, has been appointed Chairman of the Board.

iRobot also announced certain preliminary fourth-quarter results. The company expects full-year 2023 revenue of $891 million, a 25% reduction, a GAAP operating loss of between $265 and $285 million, and a non-GAAP operating loss of approximately $200 million. iRobot ended fiscal 2023 with $185 million in cash and cash equivalents, funded primarily from its three-year $200 million credit agreement with The Carlyle Group, which matures on July 24, 2026.

Shares of iRobot are down 17% in pre-market trade on Monday.