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iRobot plummets after terminating Amazon deal; CEO resigns
iRobot plummets after terminating Amazon deal; CEO resigns By Investing.com
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AuthorVahid KaraahmetovicStock Markets
Published Jan 29, 2024 08:56AM ET
© Reuters. iRobot (IRBT) plummets after terminating Amazon (AMZN) deal; CEO resigns
Shares of iRobot (NASDAQ:IRBT) plunged in premarket trading after the robot maker and Amazon (NASDAQ:AMZN) announced they mutually agreed to terminate their acquisition deal.
Shares were down 17.3% in early New York trading on Monday.
The move comes because the deal “has no path to regulatory approval in the European Union,” Amazon said in an official announcement, forcing the companies to cancel the agreement.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel.
“We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives,” he added.
Initially signed in 2022, the acquisition was meant to enable Amazon to invest in iRobot’s ongoing innovation efforts and help iRobot offer its products at lower prices to customers. Under the terms of their agreement, Amazon will pay iRobot a termination fee of $94 million.
Moreover, iRobot said it will implement an operational restructuring plan to adapt to the current environment, which includes a major leadership change.
Notably, Colin Angle, who served as Chairman of the Board of Directors and CEO, has relinquished his roles as Chairman and CEO.
In his place, Glen Weinstein, iRobot’s Executive Vice President and Chief Legal Officer, has taken on the role of Interim CEO, and Andrew Miller, the lead independent director of the Board, has assumed the position of Chairman of the Board.
Simultaneously, iRobot plans to lay off 350 employees, constituting 31% of its workforce as of December 30, 2023.
This workforce reduction will result in restructuring charges of approximately $12 million to $13 million, mainly covering severance and related expenses, over the first two quarters of 2024, with a majority occurring in Q1 2024.
AMZN rose around 0.5% in the premarket.
iRobot plummets after terminating Amazon deal; CEO resigns
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