Shares of iRobot, the maker of Roomba vacuums, surged on Friday following reports that the European Union is poised to approve Amazon’s $1.7 billion acquisition of the company. Reuters reported on Thursday that the deal is expected to receive “unconditional EU antitrust approval,” citing three sources familiar with the matter. The European Commission is anticipated to make a formal ruling on the acquisition by February 14.
While representatives from the European Commission did not immediately respond to CNBC’s request for comment, the news sent iRobot’s shares soaring by about 39% at close on Friday.
The deal is still subject to review by the U.S. Federal Trade Commission. However, the U.K.’s Competition and Markets Authority previously stated that it does not believe the acquisition will result in a “substantial lessening of competition” in the U.K.
Amazon’s stock remained flat amid the news.
Amazon initially announced its intention to acquire iRobot in August 2022 at a price of $61 per share in an all-cash deal. If approved, this acquisition would be Amazon’s fourth-largest deal, following its purchase of grocery chain Whole Foods for $13.7 billion in 2017, its acquisition of film studio MGM for $8.45 billion in 2021, and its $3.9 billion purchase of boutique primary-care provider One Medical, announced last July.
The potential acquisition of iRobot represents Amazon’s continued expansion into the consumer electronics and smart home technology market. As the deal progresses through regulatory reviews, the company is poised to further solidify its presence in the rapidly growing smart home industry.
Some analysts have suggested that the acquisition of iRobot would allow Amazon to expand its offerings in the home robotics segment, potentially integrating the robotic vacuum technology with its smart home ecosystem and advancing its presence in the broader internet of things (IoT) market.
Overall, the latest developments point to the increasing consolidation and competition in the tech and consumer electronics industry, with key players such as Amazon vying to strengthen their foothold in emerging markets and innovative technologies.