June 16 (Reuters) – On Friday, Britain’s competition authority gave the go-ahead for Amazon.com Inc.’s (AMZN.O) planned acquisition of iRobot Corp. (IRBT.O), the manufacturer of the Roomba vacuum cleaner. The deal is valued at $1.7 billion.
The Competition and Markets Authority (CMA) stated that it had reached the conclusion that the transaction would not lead to any issues regarding competition in the UK.
According to a statement made by an Amazon spokeswoman, the company is “committed to supporting regulatory bodies in their work” and is “pleased” with the judgment made by the UK Competition and Markets Authority. We are hopeful that other regulators will soon make judgments that are comparable to our own.
As Amazon sought to expand its stable of smart-home devices, which includes the Alexa voice assistant, smart thermostats, security devices, wall mounted smart displays, and a canine-like robot called Astro, the CMA had launched a “Phase 1” investigation into the deal in April. The deal had been announced in August of last year.
Regulators on both sides of the Atlantic are leery of large tech companies purchasing smaller competitors, particularly those that have access to large numbers of user data, and they have a tendency to seek concessions in exchange for sanctioning acquisitions of this nature.
“It marks a significant milestone, and both companies are continuing to work cooperatively with other relevant regulators in their review of the merger,” iRobot Chief Executive Colin Angle said in a statement following the announcement of the milestone.
As a result of the announcement, shares of iRobot that are listed in the United States increased by 18%, while shares of Amazon decreased by 1.2%.
According to Alex Haffner, a competition partner at the UK law firm Fladgate, “in reality, the ‘fundamentals’ of this deal means that the CMA’s assessment was far less controversial than in other tech-based cases given in particular iRobot’s low market share.” “In other words, the CMA’s assessment was far less controversial than in other tech-based cases.”
In the meanwhile, antitrust officials in the EU will make their decision on whether or not to approve the acquisition on July 6.
It is commonly believed that the Federal Trade Commission of the United States will launch a case against Amazon.com for antitrust violations, and the FTC is now investigating the iRobot transaction. The online store has stated that it has met with the agency’s document demands; however, it has failed to comment on the timeframe of the compliance.
The Federal Trade Commission (FTC) sent a warning letter after Amazon.com completed a prior transaction, which was the $3.5 billion buyout of primary care provider One Medical in February. The letter cited specific issues over the transaction, but the FTC did not take any further action.