Amazon’s iRobot takeover collapses in face of EU opposition
Newsflash: Amazon’s takeover of robot vacuum maker iRobot has collapsed.
The teo companies have announced they have agreed to terminate the agreeement that Amazon would buy iRobot for $1.7bn, which was agreed in August 2022.
Instead, Amazon will pay iRobot a $94m termination fee.
The move follows reports that the European Union’s competition watchdog planned to block the deal, due to concerns that it could restrict competition in the market for robot vacuum cleaners.
iRobot’s gadgets include the Roomba i7, a wifi-connected vacuum cleaner that it claims maps and learns rooms and empties itself when full.
David Zapolsky, Amazon SVP and General Counsel, says the e-commerce giant is “disappointed” that the deal could not proceed, adding:
“We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality.”
Zapolsky adds that customers will be denied “faster innovation and more competitive prices,” insisting:
Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics.
Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.”
Last June, the UK’s competition watchdog cleared the deal, after an inquiry.
Key events
As feared, shares in iRobot have tumbled at the start of trading in New York.
They’re down 17% at $14.12.
That means they have lost two-thirds of their value in the last year, having tumbled around 40% at one point last week when the Wall Street Journal reported that the EU was planning to block Amazon’s takeover.
Shares in iRobot are set to tumble when trading begins in New York in under 30 minute’s time.
They’re curently down 18% in pre-market trading….
iRobot deal ‘has no path to regulatory approval in the EU’
Amazon and iRobot make it clear that the European Union’s competition regulators have sunk their deal.
They say:
Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation.
IRobot to lay off 31% of staff
There’s more bad news for iRobot’s workers today.
Following the collapse of its takeover by Amazon, the robot vaccum maker is cutting 350 jobs, or over 30% of its workforce.
The cuts are part of an operational restructuring plan which includes making $80-$100m of cost savings.
IRobo also plans to cut its R&D spending by $20m year-over-year, by outsourcing more non-core engineering functions to “lower-cost regions”, and to cut marketing spending by $30m.
The company is also pausing all work related to non-floorcare innovations, including air purification, robotic lawn mowing and education.
There’s change at the top too – co-founder Colin Angle is stepping down as chairman and CEO.
Andrew Miller, the new chairman of the Board, says:
“iRobot is a pioneer of the consumer robot field and beloved by its customers around the world. With a legacy of innovation and a foundation of creativity, the Board and I believe that iRobot can – and will – grow its presence and continue to build a cutting-edge suite of robotic floorcare solutions that help consumers make their homes easier to maintain and healthier places to live.
To do this successfully, however, we must rapidly align our operating model and cost structure to our future as a standalone company. Though decisions that impact our people are difficult, we must move forward with a more sustainable business model, and a renewed focus on profitability.
Amazon’s iRobot takeover collapses in face of EU opposition
Newsflash: Amazon’s takeover of robot vacuum maker iRobot has collapsed.
The teo companies have announced they have agreed to terminate the agreeement that Amazon would buy iRobot for $1.7bn, which was agreed in August 2022.
Instead, Amazon will pay iRobot a $94m termination fee.
The move follows reports that the European Union’s competition watchdog planned to block the deal, due to concerns that it could restrict competition in the market for robot vacuum cleaners.
iRobot’s gadgets include the Roomba i7, a wifi-connected vacuum cleaner that it claims maps and learns rooms and empties itself when full.
David Zapolsky, Amazon SVP and General Counsel, says the e-commerce giant is “disappointed” that the deal could not proceed, adding:
“We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality.”
Zapolsky adds that customers will be denied “faster innovation and more competitive prices,” insisting:
Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics.
Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.”
Last June, the UK’s competition watchdog cleared the deal, after an inquiry.
Flutter could shift primary stock market listing to New York
Flutter, the gambling firm behind Betfair, Paddy Power, PokerStars and FanDuel, has revealed it is keen to move its primary stock market listing to Walll Street.
Flutter Entertainment is set to list on the New York stock exchange today as it aims to capitalize on America’s online sports betting boom.
It has hailed its landing on the New York stock exchange as a “pivotal moment” as its business continues to surge in the United States.
Flutter, which is already listed in London, told investers this morning that it cancelled its secondary listing on Euronext Dublin today.
It says listing on the NYSE will unlock long-term strategic and capital market benefits, and – worryingly for the City – it says the move gives “optionality to pursue a primary listing in the US”.
Flutter explains:
Since February 2023, management has engaged widely with US investors, existing and potential, along with existing shareholders globally. The feedback received has been very supportive of moving Flutter’s primary listing to the US.
As a result, the Board believes that the NYSE is now the optimal location for Flutter’s primary listing of its shares, and that the transition should be made as soon as practicable.
Shareholders will be asked to vote on whether to move the listing at Flutter’s AGM, on 1 May.
Flutter’s board says it intends to retain Flutter’s UK listing as a secondary listing, but losing another primary listing to New York would be a blow to the London Stock Exchange, following the exit of building materials group CRH last year.
Jasper Jolly
Shares in British fashion retailer Superdry have jumped 5% today, after it confirmed it is considering a significant round of cost-cutting as it contends with slumping sales.
Superdry is drawing up plans for potential store closures and job cuts after it reported last week that sales dropped by nearly a quarter in the six months to October.
The company, which has about 3,350 staff and more than 215 stores, on Monday said it had hired “advisers to explore the feasibility of various material cost saving options.”
More here.
Elsewhere in the currency markets, the Hungarian forint has hit its lowest level since early November.
The forint is down 0.85% at 359.30 forints to the US dollar, taking its losses this year to 3.6%.
The slide comes after the Financial Times reported that the EU will “sabotage Hungary’s economy” if Budapest blocks €50bn of fresh aid to Ukraine at a summit this week.
The FT says:
In a document drawn up by EU officials and seen by the Financial Times, Brussels has outlined a strategy to explicitly target Hungary’s economic weaknesses, imperil its currency and drive a collapse in investor confidence in a bid to hurt “jobs and growth” if Budapest refuses to lift its veto against the aid to Kyiv.
Hungary has concemned this plan as “blackmail” and vowed to defy EU pressure.
Hungary’s prime minister, Viktor Orbán, has faced criticism from both Brussels and Washington for trying to thwart EU aid to Ukraine and slowing the ratification of Sweden’s membership of NATO.
Lloyds to scrap mobile bank branches
Lloyds Banking Group is shutting down its mobile banking service this year.
The banking van service was set up to serve rural towns and villages where the local Lloyds branch had been closed. But the bank is now planning to scrap the Lloyds Bank and Bank of Scotland mobile branches in May.
Lloyds argues that the service, which lets people cash cheques, withdraw cash, pay bills or send money abroad, are being used by fewer customers – just a handful in some cases.
A spokeswoman said:
“Customers have used our mobile branches much less over time and some locations now have as little as two customers using the service.
“We’ll be introducing more community bankers, alongside the other options customers already have for their banking, including the Post Office, online, our mobile apps, phone banking, video services and web chat.”
The move comes days after Lloyds laid out plans to 1,600 staff from its branch network as it tries to reduce costs and push customers towards digital services.
Euro hits five-month low against the pound
The euro has fallen to its lowest level against the pound in five months, as investors anticipate interest rate cuts from the European Central Bank.
The euro has dropped by almost 0.5% today, lifting sterling to €1.1740, the highest since late August.
Against the dollar, the euro has lost 0.33% to $1.082.
The ECB left its key rate on hold at a record-high 4% on Thursday, and the money markets today are fully pricing in a 25-basis-point cut in April. Nearly 1.5 percentage points of eurozone rate cuts are expected by the end of this year.
In contrast, the first rate cut by the Bank of England isn’t fully priced in until June, although many traders expect a May cut.
GBP rises against the Euro with EURGBP ahead of the BoE on Thursday with focus on divergence between ECB and BoE, as a rate cut in April fully priced in by market for the ECB. Below 0.8520 and we visit a new 5 month low
— Saxo UK (@SaxoUK) January 29, 2024
ECB Governing Council member Mario Centeno has told Reuters that the central bank should start bringing down interest rates sooner rather than later, and do it in small steps rather than abruptly.
Centeno argued that the ECB needn’t wait for updated wage data due in May, before acting, as some policymakers believe, saying:
“There is a lot more information, and (being) data-dependent is not (being) wage-data dependent…we don’t need to wait for May wage data to get an idea about the inflation trajectory.”
But another ECB policymaker, Peter Kazimir of Slovakia, argued today that the first cut is more likely to come in June than April.
Evergrande collapse: Hong Kong court orders liquidation of China property giant
Helen Davidson
Embattled Chinese development company, Evergrande, has been ordered to liquidate by a Hong Kong court after an 18-month long hearing.
Evergrande, which holds the ignominious title of the world’s most indebted property developer with about $300bn in liabilities, failed to convince the court that it had a viable restructuring plan, after having been given seven extensions since court proceedings were first brought in June 2022. However it can still appeal.
Justice Linda Chan delivered the ruling on Monday morning, saying “it is time for the court to say enough is enough”.
The liquidation petition was lodged by Top Shine in June 2022, an investor in Evergrande unit Fangchebao which said the developer had failed to honour an agreement to repurchase shares it had bought in the subsidiary.
More here.
Belgium has posted another quarter of steady growth.
Belgian GDP expanded by 0.4% in the final quarter of 2023, according to flash data from the country’s central bank, matching growth in July-September.
On a year-on-year basis, the economy was 1.6% larger.
Belgium q4 gdp up 0.4% on quarter consensus 0.2%
— alittlebirdtold.me (@alittlebirdme) January 29, 2024
Belgium q4 gdp rises 1.6% y/y vs. 1.4% in q3
— alittlebirdtold.me (@alittlebirdme) January 29, 2024
Gas prices rising
Back in the energy market, gas prices have risen as traders worry about disruption to supplies of liquefied natural gas from the US, on top of the turmoil in the Middle Esst.
The day-ahead price of natural gas in the UK has jumped 3.65% to 71 per therm, while the month-ahead contract is 2.75% higher at 71.25p/therm.
On Friday, the White House announced that it was pausing all pending export permits for liquified natural gas (LNG) due to climate concerns.
The move could threaten more than a dozen gas export terminals that have been planned for the Gulf of Mexico coast, but the Biden administration insisted the pause will have no immediate effect on US gas supplies to Europe or Asia.
The move follows a sharp increase in US gas exports to Europe and Asia since Russia’s invasion of Ukraine.
Earlier this month, QatarEnergy, the world’s second largest exporter of liquefied natural gas, has stopped sending tankers via the Red Sea – meaning it will take longer for supplies to reach Europe.
Last week, the International Energy Agency has warned gas prices will be volatile this year, with conflict in the Middle East and Ukraine creating “an unusually wide range of uncertainty” in its forecasts.