Amazon.com Inc. has announced the cancellation of its planned acquisition of iRobot Corp, the renowned vacuum-maker. The deal, initially valued at $1.7 billion, has been terminated due to the companies’ acknowledgment of the absence of a clear path to obtaining regulatory approval.

Amazon’s decision to abandon the acquisition brings uncertainty and challenges to iRobot, as they face the aftermath by restructuring their operations.

Image: The iRobot headquarters in Bedford, Massachusetts, US, on Friday, June 16, 2023. Amazon.com Inc.’s proposed $1.7 billion deal to buy robot vacuum firm iRobot Corp. was given the all-clear by the UK’s antitrust agency. Photographer: Sophie Park

Amazon made the announcement of the terminated acquisition on Monday, explaining that the deal could not proceed due to failure in obtaining regulatory approval.

iRobot, widely known for their Roomba robotic vacuums, will now face the significant challenge of layoffs and changes in the executive leadership following the cancellation of the deal.

CEO Colin Angle will step down from his position effective immediately, adding to the reshuffling in iRobot’s high-ranked roles.

iRobot’s shares experienced a significant drop of 15% following the news of the deal’s cancellation. The market capitalization of the renowned robotic vacuum maker has now fallen below $400 million.

The future of iRobot now lies in the hands of a fierce market, where the cancellation and regulatory hurdles have led to increased market volatility.

Amazon’s failed acquisition of iRobot reflects a wider trend of regulatory scrutiny on large technology companies. Authorities worldwide have begun to examine potential anti-competitive effects that can arise from such corporate deals.

The European Union’s decision not to provide regulatory approval compounded the challenges and uncertainties surrounding the acquisition, spearheaded by concerns for fair competition in the market.

The cancellation of the iRobot deal adds to a growing list of delayed or blocked acquisitions in the technology industry. Notable examples include Meta’s acquisition of Giphy, Adobe’s terminated acquisition of Figma, Microsoft’s investment in OpenAI, and Microsoft’s acquisition of Activision Blizzard, all hampered by regulatory actions.

This pattern signifies that companies across numerous industries must now tread carefully and face ever-increasing regulatory obstacles, reflecting the efforts of various regulatory bodies to ensure fair competition.