ELUXY AB Electrolux (PK)

By Jens Hansegard 

STOCKHOLM-- General Electric has pulled the plug on the agreed $3.3 billion sale of its appliance business to Sweden's Electrolux AB, bowing to pressure from the U.S. Justice Department which wanted to block the transaction on antitrust grounds.

GE said it had terminated the sale, noting it was entitled to the $175 million breakup fee it had previously agreed with Electrolux in case the deal fell through.

"The appliances business is performing well and GE will continue to run the business while it pursues a sale," GE said.

Electrolux, which was counting the deal to bulk up its presence in North America notably against U.S. rival Whirlpool Inc., said it regretted GE's decision to walk away from the deal while antitrust proceedings were still underway.

"Electrolux has made extensive efforts to obtain regulatory approvals, and regrets that GE has terminated the agreement while the court procedure is pending," Electrolux said.

The proposed acquisition was announced on September 8, 2014. On July 1, 2015, the Department of Justice sued Electrolux and General Electric to stop the proposed acquisition.

Electrolux said that the settlement proposals it offered the Justice Department were reasonable and would have addressed The Justice Department's competition concerns.

"Unfortunately, these proposals were rejected by Justice Department," Electrolux said.

The Justice Deparment had challenged the acquisition, arguing the transaction would diminish competition and spark higher prices for cooking appliances.

In his opening statement of the antitrust court proceedings which began a month ago, Justice Department lawyer Ethan Glass said competition between GE and Electrolux has benefited appliance consumers for a generation. If the acquisition isn't stopped, Electrolux would supply two out of every three ranges sold in the U.S. and prices could rise by 5% or more, Mr. Glass said.

Write to Jens Hansegard at jens.hansegard@wsj.com

(END) Dow Jones Newswires

December 07, 2015 03:28 ET (08:28 GMT)

AB Electrolux (PK) (USOTC:ELUXY)
Historical Stock Chart
From Oct 2024 to Nov 2024

AB Electrolux (PK) (USOTC:ELUXY)
Historical Stock Chart
From Nov 2023 to Nov 2024