After significant gains last week, the stocks of iRobot Corporation dropped almost 17% on Monday. This is a result of concerns that the European Commission expressed about a $1.4 billion deal that will see Amazon taking over the robot vacuum cleaner manufacturer.
EU antitrust regulators issued a statement saying that Amazon’s acquisition of iRobot could lead to the e-commerce company restricting competition in the robot vacuum cleaner market.
“Amazon may have the ability and the incentive to foreclose iRobot’s rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs on Amazon’s online marketplace and/or at degrading their access to it,” said the statement.
European Commission has been looking into the acquisition for a while and is expected to make the final decision on the proposal in early 2024. There was a widespread belief that the ruling would be positive for Amazon, but the recent statement makes the approval less certain.
“iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products,” an Amazon spokesperson said in a statement provided to CNBC. “We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.”
iRobot shares jumped more than 40% last week following a report by Reuters that the EU Commission will approve Amazon’s acquisition of the company. However, the latest development saw the stock drop to $33.08 per share at one point on Monday compared to the opening price of $42.10.