GE Scraps $3.3B Sale To Electrolux
FAIRFIELD, CT (AP) – GE has scrapped a $3.3 billion plan to sell its home appliance business to the Swedish company Electrolux, a deal opposed by U.S. regulators over concerns about competition.
The Fairfield, Connecticut, conglomerate said that it will continue to run the business as it looks for other options to sell it.
General Electric Co. offered no reason for its decision in a brief statement released Monday.
Electrolux is the world's second-biggest home appliance maker after U.S. rival Whirlpool. The Stockholm-based company sells most of its products in the U.S. under the Frigidaire brand.
The U.S. Department of Justice had sued to stop the deal in July, saying the combined company would dominate sales of ovens and other cooking-related kitchen appliances, especially to customers like home builders, property managers, hotels, and governments.
An antitrust attorney representing Electrolux downplayed competitive concerns by noting that Asian brands like Samsung and LG have rapidly increased their share of the large appliance market over the past decade. The attorney also said huge retailers like Home Depot and major home builders can pressure manufacturers to keep prices low and competition intense.
Electrolux said Monday that it "regrets that GE has terminated the agreement while the court procedure is still pending."
The Swedish company said settlement proposals that it considered to be reasonable were offered to federal regulators and would have addressed concerns about competition, but the Department of Justice rejected those proposals.
General Electric has been selling parts of its portfolio as it pushes to focus more on core industrial businesses that make large, complicated equipment for other companies.
It said Monday that it was entitled to a breakup fee of $175 million from Electrolux.
GE shares fell 17 cents to $30.32 on morning trading Monday, while Electrolux AB Class B shares dropped almost 13 percent in late trading in Stockholm.