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Lured by a bargain, Ruth Horn, 76, of Los Angeles, bought what she thought was a Roomba to vacuum her home, but the experience turned out to be a disappointment.
“It just kept getting stuck somewhere and going around in circles,” Horn said. She found it to be a cheap imitation.
Meanwhile, Marcy Lewis, 75, of Madeira, Ohio, wanted a robot vacuum, so she purposefully chose a knockoff.
“I’m pretty low-tech, but it made my house cleaner, I worked less, and it seemed like a good idea,” Lewis said.
She was looking at Prime Day sales and got a great deal on an Eufy robot vacuum. “I really liked it and did a good job, but it didn’t last long,” Lewis said.
Product quality was one of Roomba’s advantages in a world of cheap imitations, but it didn’t save the manufacturer from bankruptcy. iRobot It was announced earlier this week. And competition from low-cost China was not the only factor in the failure. Tried to acquire iRobot in 2022 AmazonRegulatory interference and changing dynamics around mergers and acquisitions are ongoing concerns for beleaguered technology companies, which in the past have looked to M&A as a savior rather than just an exit plan.
The company, which Amazon agreed to buy in August 2022 for $1.7 billion, reported in a court filing last Sunday that the company has assets and debts of between $100 million and $500 million, and owes about $100 million to its largest creditor, Shenzhen Picea Robotics Co., a contract manufacturing company based in China and Vietnam that currently owns the company. The company has a total of $190 million in debt, according to Reuters.
iRobot co-founder and CEO Colin Angle told CNBC in a statement earlier this week: “Today’s outcome is extremely disappointing. And it was avoidable.” “This is nothing short of a tragedy for consumers, the robotics industry, and America’s innovation economy.”
In early 2024, Amazon CEO Andy Jassy told CNBC that regulators’ efforts to block the deal were a “sad story” that would have made iRobot more competitive against rivals.
Some M&A experts agree with the views of both the acquirer and the bankrupt company.
“The iRobot scandal shows that when regulators prioritize hypothetical future damage over current financial reality, they fail to protect competition and end up destroying the companies they target,” said Christina Minnick, a professor of finance at Bentley University. “iRobot’s bankruptcy is a decisive wake-up call about the current M&A environment, highlighting concerns that regulators are dismantling traditional safety nets for struggling companies.”
Acquisitions are essential for asset recycling and economic growth, but U.S. and European regulators have taken actions in recent years that have “distorted this natural cycle,” Minick said.
She added that by blocking Amazon’s White Knight acquisition of iRobot, regulators removed the only viable exit for the embattled American robotics pioneer.
“In a tragic irony, instead of remaining an independent competitor, iRobot was forced into bankruptcy and is now sold to one of its manufacturing partners in China.
With the expansion of technology, regulators effectively handed over valuable intellectual property and market share to the foreign competitors that had killed the company in the first place,” Minick said.
New problems emerged for the already fragile company after Amazon abandoned the deal in early 2024 over the possibility that European regulators would block it.
“The Roomba was pushed into Chapter 11 not just because its battery died, but because European regulators kicked out Amazon’s $1.4 billion escape hatch and left it flush with cash on the living room floor,” said Eric Schiffer, chairman of Reputation Management Consultants. “Amazon stalled, tariffs were imposed, cheaper rivals flocked, and suddenly the king of robot vacuums was begging his manufacturers to protect their plastic back ends,” Schiffer said. “This is a warning that if your business model ends up being acquired by Big Tech, hostile regulators in Europe could turn your dream exit into a Caligula-level catastrophic implosion.”
Jay Jung, managing partner at San Francisco-based corporate financial advisory firm Embark Advisors, said iRobot’s bankruptcy bodes ill for similar deals in the future unless regulators learn the lessons of the past few years. “European regulators have the right to block such transactions,” he said. But, he added, “their stance is too anti-big tech. When a Chinese company like this buys, they will keep the brand, but everything will move to China. Jobs will be lost, and all economic benefits other than the brand will be lost.”
At least publicly, the Trump administration’s Federal Trade Commission appears to be taking a more hands-off approach to M&A than its Biden-era predecessor, led by FTC Chair Lina Khan, who took a hawkish position on antitrust laws. The company has vowed to take a two-pronged approach to the merger. The idea is to aggressively pursue companies that are deemed anticompetitive and move one of those companies out of the way that doesn’t meet that standard. “If you think there’s a merger or conduct that violates antitrust laws and you can prove it in court, I’m going to take you to court. If not, I’m going to take you down hard,” FTC Chairman Andrew Ferguson said on CNBC’s Squawk Box earlier this year.
However, in Europe, views on M&A by high-tech companies remain critical. Teresa Rivera, the EU’s antitrust chief, cabled earlier this month that more comments could come as she announced an antitrust investigation into Meta’s plans to block an AI rival from WhatsApp. He said the move was meant to prevent powerful tech companies from “abusing their power to crowd out innovative competitors.”
That’s cold comfort for struggling tech companies, which Minnick said have already found workarounds to avoid antitrust scrutiny. As a direct result of these exit blocks, tech giants are now trying to circumvent regulators through asset purchases rather than outright takeovers.
“In deals like Microsoft’s deal with Inflection AI or Amazon’s deal with Adept, the acquirer licenses intellectual property while leaving behind a shell of the company and hiring the target’s founders and key engineering talent,” Minick said, adding that this “reverse acquisition” structure is specifically designed as a loophole to avoid antitrust scrutiny.
In fact, the FTC issued a report on these types of transactions in the final days of Lina Khan’s tenure, after placing Amazon and Adept’s transactions under scrutiny.
Minick says even if the deal is successfully arranged, the solution to the broader M&A problem remains incomplete. “While this allows the technology to survive, it is a suboptimal outcome, with ordinary shareholders and non-essential employees often left behind in hollowed-out zombie companies, proving that regulatory frictions are forcing the market into increasingly complex and inefficient twists to survive,” she said.
Friday, June 16, 2023, iRobot headquarters in Bedford, Massachusetts, USA.
Bloomberg | Bloomberg | Getty Images
Minick believes that if things don’t change, we could see more zombie scenarios in which struggling technology and media companies find their exits blocked by foreign and domestic regulators. “Not allowing organic consolidation means we could see more chaotic bankruptcies instead of orderly acquisitions that preserve jobs and innovation,” Minick said. “If potential acquirers were genuinely concerned about overpayments and regulatory hurdles, they would choose not to get involved. But when regulators preemptively cut off these lifelines to make philosophical points, they are not saving the market, but rather destroying the mechanisms that enable economic recovery and growth,” she added.
Roomba faced headwinds beyond M&A, including financial problems accelerated by the Trump administration’s trade policies.
Ragini Bhalla, head of brand at Creditsafe, has been keeping an eye on iRobot’s deteriorating financial situation for some time. Barra said the company started paying vendors three to four weeks late in May, and fluctuations in payments to vendors and suppliers are typically an early warning sign of emerging liquidity pressures. He also said iRobot’s credit score steadily declined over a five-month period until it was rated as “very high risk” in June 2025 and remained there until it filed for bankruptcy.
Barra also pointed out that increased competition from lower-cost Chinese rivals has reduced revenues, with tariffs emerging as a direct and substantial driver. Trade policy became the deciding factor. “Most Roombas are manufactured in Vietnam, and iRobot is exposed to new import duties from the United States, which have added millions of dollars in costs and disrupted future plans,” Barra said.
Ultimately, a combination of rising debt, declining demand, and cost pressures from tariffs forced iRobot into bankruptcy and a manufacturer-led takeover. “This shows how trade policy shocks can quickly turn underlying operational stress into a solvent event for hardware-dependent companies,” Barra said.
Schiffer says there’s no turning back from the global antitrust regime, and Roomba may just be the most high-profile casualty of 2025.
“Your suitor may live in Seattle, your stock is on the Nasdaq, and some weird committee in Brussels can put a bullet into your wedding,” Schiffer said, adding that for founders, “Roomba is a warning sign that if you’re relying on one big deal to save yourself, you’re not building a strategy, you’re rehearsing for disaster.”
Meanwhile, Lewis from Ohio just wants a working Roomba.
“I’m surprised by the bankruptcy, but I don’t feel like it affects me. I’m also disappointed that Chinese companies are buying Roomba. Sadly, that seems to be the case now. Buying American is good, but it’s getting harder and harder.”
