Actions of I robot (NASDAQ:IRBT) fell 19.8% Wednesday evening after Politico reported Amazon.com (NASDAQ:AMZN) will not offering concessions to European Union (EU) antitrust regulators as it works to clear its imminent acquisition of the home robotics specialist.
Amazon does not back down from antitrust regulators
Citing two people familiar with the matter late this afternoon, Politico says Amazon and iRobot have until the end of the day. Today submit offers to the European Commission (EC) to make changes to Amazon’s activities in the EU market. Amazon apparently chooses not to give in to this pressure.
Reminder in November, the EC issued a “statement of objections” to Amazon’s deal to acquire iRobot — best known for its Roomba robot vacuum (RVC) line — detailing its view that the purchase could restrict competition in the RVC market.
Has Amazon just bluffed the European Commission?
As things stand, the EC has set February 14, 2024 as the deadline to approve or reject the acquisition. By choosing not However, Amazon did not want to propose changes to its operations in Europe, but it significantly increased the risk that regulators would decide to cancel the deal.
However, at the same time, Reuters previously reported that the EC’s lawyers were initially opposed to sending the Statement of Objections to Amazon, arguing that the acquisition posed no competitive threat and should be cleared unconditionally. With that in mind, this may be more about Amazon bluffing regulators and assuming the deal will go through anyway.
If that happens – and as iRobot shares are now trading at a more than 40% discount to the agreed acquisition price – it could make for an interesting merger arbitrage for investors willing to make a speculative bet on the conclusion of the transaction.
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Why iRobot Stock Dipped Today was originally published by The Motley Fool
