Amazon takeover of iRobot to be blocked by EU

Amazon's takeover of vacuum cleaner maker iRobot is set to be blocked by the European Union's competition watchdog, the BBC understands.

It's a blow to the tech giant, which was previously given the all-clear for the purchase by the UK government's competition watchdog.

The Competition and Markets Authority (CMA) found that its place in the UK market was "modest" and that it already faced several significant rivals.

Amazon declined to comment.

The online giant moved to buy iRobot, maker of the Roomba cleaner, in August 2022 in a takeover deal set to cost $1.7bn (£1.4bn).

It was looking to expand its footprint in the market for smart home appliances.

But regulators are worried that iRobot's tie-up with Amazon could make it difficult for other vacuum-makers to compete, especially if Amazon were to give the Roomba benefits over rivals on its e-commerce site.

The European Commission (EC), which serves as the EU's competition watchdog, opened an investigation into the purchase last July.

The EC has the legal deadline of February 14 to make its decision but the commission's 27 top political leaders will need to reach consensus on the rejection before a final decision can be issued.

iRobot shares tanked 40% in after hours trading after the first reporting of the EU's intentions by the Wall Street Journal.

The takeover by Amazon had been seen as a boon for the firm, as it has struggled with sales declines.

"If the objective is to have more competition in the home robotics sector, this makes no sense," said Matt Schruers, president of tech lobbying group Computer and Communications Industry Association.

"Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug," Schruers told Reuters.

Roomba models sell in the region of £1648 in the UK.