iRobot stock plunges on report EU will block Amazon deal
Shares of iRobot (IRBT) sank in early trading on Friday. The Wall Street Journal reported that a European Union regulator will block Amazon's (AMZN) $1.4 billion bid to buy the Roomba maker, sending the stock sharply lower. Yahoo Finance's Brad Smith and Seana Smith break down what could lie ahead for the deal.
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Editor's note: This article was written by Stephanie Mikulich
Video Transcript
BRAD SMITH: A trending ticker we're watching this morning, iRobot, plunging after the EU reportedly intends to block Amazon's $1.4 billion bid to buy the company according to the "Wall Street Journal." The rejection would still need formal approval before a final decision. There you're taking a look premarket at shares of iRobot down 31% as of right now.
Larger question is, was Amazon and are they going to be willing to go back and try to put forward these concessions? They already missed the deadline unclear as to whether or not there will be some leeway here with the EU regulators there.
SEANA SMITH: Yeah. There's lots of question there. And, obviously, we're seeing the reaction play out in shares this morning. iRobot, one of the top trending stickers-- tickers on our "Yahoo Finance" site. But moving this forward beyond the EU, of course, then the focus comes to the FTC. The focus comes to US regulators. There are reports here that it is expected that US regulators are going to push back against this deal, citing antitrust concerns. They are preparing Amazon for a legal challenge here in the EU. They did decline in terms of making any sort of concessions that the EU had been pushing for. And the EU regulators have been pushing for Amazon to pledge fair treatment to all robot vacuums that were offered on their platform.
So pushing back on that, they're now preparing for a legal challenge. But, again, this then, when we look ahead, we turn our focus to the US, to regulation here. We know, obviously, there has been a crackdown under the Biden administration pushing back on some of these types of deals in terms of antitrust concerns, in terms of this monopoly concern, whether or not there's going to be fair competition throughout this space.
So once you see some of the pressure from overseas, from EU antitrust regulators planning to reject this $1.4 billion bid for iRobot, then you have to think to yourself, there's a good chance that maybe US regulators are going to take a similar view.
BRAD SMITH: Yeah. And the EU has been more stringent on Amazon. If you think back to some of the other settlements that Amazon and the EU have had to reach in the past over anti-competitive practices, this is just another point in the chronological order that we've seen for the EU-Amazon tussle.
SEANA SMITH: It is. We will see once we get that official decision. Again, just a report here from the Journal.
