Amazon to buy Roomba maker iRobot for roughly $1.7 billion

NEW YORK — Amazon said Friday it has agreed to acquire vacuum cleaner maker iRobot for roughly $1.7 billion, snapping up another company to add to its collection of smart home appliances amid broader concerns about its market share. power.

iRobot sells its products around the world and is best known for the round-shaped Roomba vacuum, which will join the Alexa voice assistant, Astro robot and A ring security cameras and more in the list of smart home features offered by the Seattle-based e-commerce and technology giant.

The move is part of Amazon’s attempts to own some of the home space through services and accelerate its growth outside of retail, said Neil Saunders, managing director at GlobalData Retail. Multiple home cleaning robots add to the company’s tech arsenal, making it more involved in users’ lives beyond static things like voice control.


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Amazon’s Astro robot, which helps with tasks like setting an alarm, was introduced last year at an introductory price of $1,000. But its distribution was limited and received a poor response.

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Amazon hasn’t had much success with home robots, but the acquisition of iRobot and the company’s strong market reputation provide “a huge foothold in the consumer robot market” that could help Amazon replicate the success of its Echo line of smart speakers, Lian Jye Su said. robotics analyst for ABI Research.

Su said it also illustrates the shortcomings of consumer robotics vendors such as iRobot, which have struggled to expand beyond a niche product and were in a “race to the bottom” with Korean and Chinese manufacturers offering cheaper versions of robotic vacuums.

On Friday, iRobot reported its quarterly results. Revenue plunged 30%, mainly due to reduced orders and delays, and the company announced it was cutting 10% of its workforce.

Amazon said it will acquire iRobot for $61 per share in an all-cash transaction that will include iRobot’s net debt. The company has total current debt of approximately $332.1 million as of July 2. The deal is subject to approval by shareholders and regulators. Upon completion, iRobot CEO Colin Engle will remain in his post.

Noting that iRobot has operated its robotics platform on Amazon’s AWS cloud services unit for many years, Su said the acquisition could lead to greater integration of Amazon’s speech recognition and other vacuum capabilities.

Shares of iRobot rose 19% in midday trading. Amazon was down 1.4%.

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The deal comes as antitrust advocates continue to raise concerns about Amazon’s growing dominance. The purchase of iRobot is Amazon’s fourth-largest acquisition, led by its $13.7 billion deal to buy Whole Foods in 2017. Last month, the company said it would buy primary care provider One Medical in a deal valued at roughly $3.9 billion, a move that expanded its reach even further into healthcare.

On Friday, groups advocating for stronger antitrust regulations urged regulators to block the iRobot merger, arguing that it gives Amazon more access to consumers’ lives and strengthens its dominance of the smart home market.

“The last thing Americans and the world need is Amazon siphoning off even more of our personal information,” said Robert Weissman, president of the progressive consumer rights group Public Citizen.

“It’s not just about Amazon selling another device on its marketplace,” Weissman said. “It’s about the company getting even more intimate details of our lives to gain an unfair market advantage and sell us more stuff.”

Landmark antitrust legislation targeting Amazon and other big tech companies has languished for months in Congress as prospects for a vote by the full Senate or House of Representatives dim.

Last month, Sen. Amy Klobuchar, D-Minn., who heads the Senate Judiciary Antitrust Panel, called on the Federal Trade Commission to investigate the acquisition of One Medical, in line with other critics who urged regulators to block the purchase because of concerns about Amazon’s past conduct and potential implications for users’ health data. Regulators also have discretion to challenge Amazon’s $8.5 billion purchase of the Hollywood studio MGMwhich was completed earlier this year.

Founded in 1990 by a trio of MIT roboticists, including Angle, iRobot’s early ventures led to rovers capable of military and disaster relief tasks after the 9/11 attacks.

Profits from defense contracts allowed iRobot to experiment with various other robots, producing some duds and one huge commercial success: the first Roomba, introduced in 2002, which pioneered the automated vacuum cleaner market.

The company spun off its defense robotics division in 2016 to become almost exclusively a seller of vacuum cleaners and some other home robots, such as the Braava robotic mop. It had planned to launch a robotic lawnmower in 2020, but backed out, citing issues related to the pandemic.

Author of AP Technologies Matt O’Brien contributed to this report from Providence, Rhode Island.

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