FTC launches investigation into Amazon’s proposed $1.7B iRobot acquisition

FTC launches investigation into Amazon’s proposed $1.7B iRobot acquisition

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The U.S. Federal Trade Commission has launched an investigation into Amazon.com Inc.’s proposed acquisition of iRobot Corp. for $1.7 billion.

The investigation was disclosed by iRobot in a regulatory filing that became public today.

Nasdaq-listed iRobot develops the popular Roomba line of robot vacuums. It also sells robot mops under the Braava brand, as well as a number of other products including air purifiers. The company’s robots can avoid obstacles, clean under furniture and automatically recharge their batteries. 

Consumers have bought more than 40 million Roomba systems since iRobot first introduced the product line in 2002. Last quarter, iRobot generated revenues of $255.4 million, $225 million of which was attributed to its flagship Roomba business. The company shipped a total of 766,000 Roomba systems and 99,000 robot mops during the quarter. 

According to the regulatory filing released by iRobot today, the FTC on Monday requested that both Amazon and iRobot provide “additional information and documentary materials” about the proposed acquisition. The agency made the request in connection with an antitrust review of the deal. The filing stated that Amazon and iRobot both expect to promptly respond to the request as well as “work cooperatively” with the FTC.

FTC investigations into such deals reportedly take up to a year. After an investigation concludes, the agency can file a lawsuit to block an acquisition or request that the companies involved in the transaction make concessions. The FTC can also opt to allow a transaction to close in accordance with the original acquisition terms.

The launch of the FTC probe into the proposed acquisition of iRobot comes a few months after the agency filed a lawsuit to block Meta Platforms Inc.’s purchase of Within Unlimited Inc., a Los Angeles-based virtual reality application developer. Meta agreed to buy the company earlier this year in a deal reportedly valued at $400 million.

If it receives regulatory approval, Amazon’s proposed acquisition of iRobot will position the company as one of the leading players in the home robotics market. Amazon already has a presence in that market with Astro, an Alexa-equipped residential robot introduced last year. The company also competes in the broader smart home market with its Echo and Ring connected device portfolios.

The proposed purchase of Roomba is one of two robotics-related acquisitions that Amazon has announced in recent quarters. Earlier this month, the online retail and cloud computing giant inked a deal to buy Belgium-based machinery maker  Cloostermans-Huwaert NV. Cloostermans designs and manufactures systems such as warehouse robots.

Amazon has deployed more than 520,000 warehouse robots throughout its supply chain over the past decade, the company disclosed in conjunction with the Cloostermans acquisition. The acquisition will support Amazon’s warehouse automation efforts. Potentially, Cloostermans’ robot design and manufacturing expertise could also benefit Amazon’s home robotics business.

Amazon is one of several major tech firms working to establish a bigger presence in the robotics market. Google LLC parent Alphabet Inc. in July launched a new venture, Intrinsic, that focuses on making industrial robots easier and more affordable to use. Nvidia Corp., in turn, today debuted a new computing module optimized to power autonomous machines that require the ability to run onboard artificial intelligence software.

Image: iRobot

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