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General Electric calls off $3.3 billion sale to Electrolux

December 7, 2015

General Electric Co. 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-based conglomerate said that it will continue to run the business as it looks for other options to sell it.

GE 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 GE Appliances division is based in Louisville, where it has about 6,000 employees, including 3,800 hourly manufacturing workers.

In Indiana, GE Appliances was once the largest manufacturer in Bloomington and had more than 3,000 employees in the late 1990s. Employment there dwindled to less than 400 in recent years as demand for side-by-side refrigerators slowed and GE sent production work to Mexico.

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 26 cents to $30.23 in morning trading Monday, while Electrolux shares dropped 11 percent in afternoon trading in Stockholm.

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