Shares of consumer robot company iRobot (NASDAQ:IRBT) are down nearly 20% on Monday at writing. This significant decline comes after the European Union noted concerns about the company’s planned $1.4 billion sale to tech giant Amazon (NASDAQ:AMZN).
Notably, the European Commission said in a statement that the planned deal poses a threat to competition in the market for robot vacuum cleaners (RVCs). Furthermore, the regulator said that an in-depth investigation revealed the deal could hamper the ability of rival RVCs to compete effectively. These concerns have been mentioned to Amazon.
This recent development follows a Reuters report last Friday that the planned acquisition was set to receive unconditional approval in the EU. That announcement sent the iRobot shares up 40%, most of which the shares have now shed following this recent sell-off.
On whether the deal would go through or not, the European Commission has until February 14 to make a final decision. Nonetheless, the decision of the European regulators weighs significantly as it marks the last step in regulatory approval travels for the deal.
Earlier in June, antitrust regulators in the UK gave the acquisition a go-ahead. Around the same period, Amazon stated it had complied with the second request of the Federal Trade Commission concerning the deal. The regulator sent similar requests to iRobot in September.
Is IRBT Stock a Good Buy?
On TipRanks, analysts are sidelined on IRBT stock with a Hold consensus rating based on two Holds. With a 28.39% decline in its share price this year, the average IRBT price target of $51 per share implies 46.55% upside potential.
