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UK Clears Amazon’s $1.7 Bln Deal For Roomba Maker iRobot

Britain’s competition regulator on Friday cleared Inc’s (AMZN.O) planned $1.7 billion acquisition of iRobot Corp (IRBT.O), maker of the Roomba vacuum cleaner. The Competition and Markets Authority concluded that the deal, subject to approval from iRobot shareholders, would not lead to competition concerns in the country.

The purchase is part of Amazon’s drive to own parts of consumers’ homes through services and accelerate its growth beyond retail. The e-commerce giant’s latest offerings include an Echo device that lets people talk to their homes and a slew of robots, including its new ‘Panda’ home-cleaning bot. The company also has a delivery drone program and is trying to become a significant supplier of groceries.

iRobot, which has sold more than 40 million robots since it was founded by Massachusetts Institute of Technology roboticists in 1990, makes self-driving machines that clean floors, vacuum, and mop. Its products are used by more than a third of households in the United States and by a quarter of homes around the world.

In its clearance decision, the CMA ruled that iRobot’s position in the UK is small and faces several significant competitors. The authority also said that the company’s combined market share is limited and unlikely to change substantially.

However, the CMA’s clearance is not a final ruling on the deal, and it could still face challenges in Europe. The European Commission is investigating whether Amazon abuses its dominant position in the EU marketplace by giving an unfair advantage to its retail business and sellers that use its services over other third-party merchants on its website.

The CMA said it would be able to apply unique abuse controls, which are meant to prevent online platforms from using their dominance in one market to exploit customers in other markets. It added that it would consider several factors, including the pricing of products and the number of sales per customer.

Miya Knights, head of industry insight at Eagle Eye, says the 16% cap set out by the CMA will likely prove a recurring theme. “Amazon will want to increase its stake if it sees good returns on its initial investment,” she said.

A spokesperson for Amazon said the company was pleased with the CMA’s decision and committed to supporting regulatory bodies in their work. The company had no further comment. iRobot’s shares rose 12% in pre-market trading on Friday, and Amazon was down slightly. The FT reports that the EU investigation may be close to resolution. Amazon offers to share more data and boost the visibility of rivals’ products in exchange for a lower fine. (Reporting by David Kirkpatrick; Editing by Yvonne Doyle)

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Magazine Herald
Magazine Herald
Madalyn D'Cruz is a social media, Magazine expert and digital marketing strategist who has helped numerous businesses build their online presence. She has a degree in marketing from the University of Florida and is constantly staying up-to-date on the latest social media trends and best practices. Maria also enjoys photography, travel, and spending time with her family.


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