Amazon.com Inc. announced today that it has called off its planned acquisition of robot vacuum Roomba maker iRobot Corp. after the deal faced increased attention from regulatory agencies in the United States and the European Union.

Both companies released a joint statement noting that the deal signed in August 2022, which would have seen iRobot acquired by Amazon for $1.7 billion cash, would be dissolved by “mutual agreement to terminate.” As part of the termination, Amazon will pay iRobot a fee of $94 million.

“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon’s senior vice president and general counsel. “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.”

The sudden decision to terminate the deal comes after a long road of regulatory scrutiny starting with an investigation from the U.S. Federal Trade Commission in 2022 and the European Commission, the EU’s executive arm and top antitrust enforcer. The saga came to a head earlier this month when iRobot’s shares dropped 30% after a report from the Wall Street Journal surfaced that the EC planned to block Amazon’s takeover.

At the time the EC said that it was concerned that Amazon would become a primary channel for the sale of robot vacuum cleaners, thereby blocking other competition from the market. This could degrade the market, the regulator said, by reducing access to a primary avenue for consumers.

“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,” Zapolsky said about the outcome.

Alongside the acquisition deal falling through, iRobot announced that the company will lay off 350 workers, or 31%, of its staff as part of a restructuring plan designed to stabilize the company. The company also said that Colin Angle, the company’s chief executive, will step down to be replaced by Glen Weinstein, iRobot’s executive vice president and chief legal officer, who will serve as interim CEO.

Image: iRobot