Amazon’s $1.7B acquisition of iRobot, the maker of Roomba, is approved by UK regulator.
Today, on Friday, June 16, the UK’s competition regulator approved Amazon’s planned acquisition of iRobot Corporation, the maker of Roomba vacuum cleaners. The Competition and Markets Authority (CMA) stated that the deal would not raise any competition concerns in the country. The CMA had been investigating the deal since April 2023, following Amazon’s desire to add more smart-home devices to its collection, such as the Alexa voice assistant, smart thermostats, security devices, smart displays for walls, and a robot named Astro that looks like a dog. The CMA had considered three potential areas of concern, such as whether Amazon might start selling robot vacuum cleaners if the merger doesn’t happen, whether Amazon could use its online store to give iRobot’s competitors a disadvantage if the merger goes through, and whether iRobot vacuum cleaners are important for “smart home” platforms, and if Amazon could give its smart home competitors a disadvantage if the merger happens.
- The first area of concern was whether Amazon might start selling robot vacuum cleaners if the merger doesn’t happen and whether this would significantly reduce competition.
- The second area of concern was whether Amazon could use its online store to give iRobot’s competitors a disadvantage if the merger goes through.
- The third area of concern was whether iRobot vacuum cleaners are important for “smart home” platforms and whether Amazon could give its smart home competitors a disadvantage if the merger happens.
Amazon is pleased with the UK Competition and Markets Authority’s decision and is committed to supporting regulatory bodies in their work. After doing the due diligence, the CMA concluded that Amazon’s acquisition of iRobot wouldn’t violate any competition concerns that the regulator had. iRobot doesn’t have a significant market share in the UK for robot vacuum cleaners and already faces significant competition. Therefore, Amazon’s entry wouldn’t greatly affect the market. Despite being a major retailer, Amazon wouldn’t have a strong incentive to disadvantage other robot vacuum cleaner manufacturers. The UK market for these cleaners is small and not expected to grow much, so the benefits would be limited. Additionally, pursuing such a strategy would be costly for Amazon. The acquisition of iRobot wouldn’t harm Amazon’s competitors in the “smart home” market, as there are other vacuum cleaners with similar capabilities that can be part of rival “smart home” offerings. Colin Raftery, Senior Director of Mergers at the CMA, stated that it marked a significant milestone, and both companies are continuing to work cooperatively with other relevant regulators in their review of the merger.
If you want to get other fresh insights from the business world, follow this link.