Roomba Maker IRobot Stock Shoots Higher Friday - What's Going On With Amazon Deal?

The Competition and Markets Authority (CMA) cleared Amazon.Com, Inc's AMZN purchase of Roomba maker IRobot Corp IRBT, triggering a rally in the stock price of the target company.

Amazon announced its proposed purchase of iRobot for $1.7 billion in August 2022.

iRobot designs and builds consumer robots, including robot vacuum cleaners sold under the 'Roomba' brand. The CMA has concluded that the deal would not hamper competition in the U.K.

It found that iRobot's market position in the supply of robot vacuum cleaners in the U.K. is modest and already faces several significant rivals.

The acquisition would not harm Amazon's rival 'smart home' platforms as robot vacuum cleaners (and the data they gather) are generally not considered an essential input to the emerging "smart home" market in the U.K.

While Amazon could use its position as a major retailer to harm rival robot vacuum cleaner manufacturers, it would have limited benefits, given the size of the U.K. market for robot vacuum cleaners.

Price Action: IRBT shares traded higher by 18.90% at $50.02 premarket on the last check Friday.

Photo via Wikimedia Commons

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