iRobot, the American company that created the robotic vacuum Roomba, filed for bankruptcy on Sunday, sending the company into the arms of its Chinese manufacturer just three years after regulators blocked a proposed sale to Amazon.
Under the bankruptcy plan, iRobot’s manufacturer, Picea, will take 100% of the company’s equity, shifting ownership from American to Chinese hands. The filing comes after iRobot cited declining sales, increased competition from lower-priced alternatives, and rising supply chain and manufacturing costs. Initially, the company hoped to merge with Amazon to improve its scale and get more competitive pricing for parts and inventory.
While the Federal Trade Commission has not commented on iRobot’s bankruptcy, the commission welcomed the collapse of the Amazon deal in January 2024. “We are pleased that Amazon and iRobot have abandoned their proposed transaction,” the United States Federal Trade Commission said. “The Federal Trade Commission will not hesitate to take action in enforcing the antitrust laws to ensure that competition remains robust.”
Three years later, iRobot’s bankruptcy leaves the United States without a major American-owned competitor in the home robotics industry.
With iRobot’s bankruptcy, shareholders are expected to see their equity wiped out — an outcome that contrasts sharply with the $61 per share cash payout investors would have received had the Amazon acquisition gone through. Senator Elizabeth Warren (D-MA), who urged regulators to oppose the deal, said at the time that Amazon should not be allowed to use acquisitions to avoid competition.
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“I have serious concerns about Amazon’s deal to buy iRobot,” said Warren. “We’re asking the FTC to oppose this proposed deal to protect competition and consumers. Amazon shouldn’t be allowed to just buy their way out of competing.”
After the deal collapsed, iRobot laid off roughly one-third of its workforce and its stock price plummeted. Amazon CEO Andy Jassy later described the company’s struggle as “a sad story.”
“This American company invented this product, invented the category and built a business that was almost $1 billion in revenue,” Jassy said. He argued that successful businesses naturally attract competition, including from Chinese manufacturers, and that iRobot needed scale to survive.
“They needed to scale because scale lets you buy components at the right price and invest in R&D,” Jassy said.
Jassy also addressed privacy concerns, noting that robotic vacuums must map the inside of customers’ homes to avoid running into furniture.
“What Western regulators were saying is that they trust these two large Chinese companies with maps of the inside of U.S. consumers’ homes more than they do Amazon,” he said. “That can’t be what we were going for. I think we’ve got to try and find a way to be reasonable with what we are doing.”
At the time the deal was blocked, the Federal Trade Commission was chaired by President Joe Biden appointee Lina Khan, who quickly became known for her aggressive approach to antitrust enforcement, particularly toward large technology companies. Khan now serves as New York City Mayor-elect Zohran Mamdani’s transition team chair.
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