Amazon already owns, for example, the Ring home monitoring device and the smart thermostat in the category known as the Internet of Things. However, devices still make up only a fraction of the company’s total sales.
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iRobot manufactures the $1,000 Roomba vacuum cleaner, which, in addition to cleaning, is also able to record data about the space in the home. These can be valuable for a company developing technologies for smart homes. However, iRobot’s success has been hit as consumers begin to rethink how they spend their money due to high inflation. The company’s sales fell by 30 percent in the second quarter.
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The deal comes as analysts expect cash-strapped tech companies to launch a wave of mergers and acquisitions to take advantage of low prices. Amazon currently has more than $37 billion in cash.
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Amazon will pay $61 for one share of iRobot. Compared to the stock’s last closing price, this represents a gain of 22 percent. Amazon will also assume approximately $332.1 million in debt. The transaction still needs to be approved by shareholders and the regulatory authority.
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Concerns about Amazon’s growing dominance
The deal comes as antitrust campaigners express concern about Amazon’s growing dominance. The purchase of iRobot is the company’s fourth-largest acquisition, the largest being the $13.7 billion takeover of Whole Foods in 2017.
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Last month, Amazon announced it would buy primary care provider One Medical for about $3.9 billion, expanding its efforts into the health care space. Antitrust groups have therefore urged the regulator to block the iRobot merger because it gives Amazon greater access to consumers’ lives and strengthens its dominant position in the smart home market.
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“The last thing Americans and the world need is for Amazon to siphon off even more personal information,” said Robert Weissman, president of the consumer rights group Public Citizen. According to him, Amazon will thus gain even more confidential information about the lives of consumers and an unfair market advantage when selling other things.
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