Amazon.com has reduced its acquisition price for iRobot by approximately 15 percent, lowering the deal to around $1.42 billion.
The decision came after iRobot, the renowned manufacturer of Roomba vacuum cleaners, accumulated additional debt. As per the amended agreement, Amazon will now pay $51.75 in cash for each share of iRobot, down from the original price of $61.00.
In response to the news of the reduced offer, iRobot’s shares experienced a significant decline of more than 10 percent, dropping to $42.50. This downturn marks the company’s worst day in the stock market since February of the previous year, before the acquisition deal was initially announced. Meanwhile, Amazon’s stock saw a marginal increase of 0.3 percent.
The adjustment in the deal’s price is expected to be balanced out by iRobot’s plans to raise its net debt. The company has secured a $200 million financing facility aimed at supporting its ongoing operations.
Colin Angle, chairman and CEO of iRobot, stated: “We’ve reached an amended agreement with Amazon that reflects the incurrence of iRobot’s new debt.” The agreement was first unveiled in August the previous year and represented Amazon’s endeavor to expand its array of smart home devices.
However, the acquisition has faced scrutiny from European antitrust authorities, who are concerned that the deal might impede competition and bolster Amazon’s dominance as an online marketplace provider. Consequently, the European Commission has initiated a full-scale investigation into the acquisition, with a decision on whether to approve or block the deal set to be reached by December 13.
Both Amazon and iRobot have confirmed their collaboration with relevant regulators during the merger’s review process. While the UK’s antitrust regulator cleared the deal in June, the European Commission’s investigation remains a pivotal point of concern for the potential acquisition.