GE calls off Electrolux appliance deal amid U.S. antitrust fight
By Simon Johnson and Diane Bartz
STOCKHOLM/WASHINGTON (Reuters) - General Electric on Monday walked away from a $3.3 billion agreement to sell its appliances business to Sweden's Electrolux, terminating the deal after months of opposition from U.S. antitrust regulators.
GE (GE.N: Quote) said it would pursue other suitors for its century-old appliance unit but declined to say who they might be.
"The appliances business is performing well and GE will continue to run the business while it pursues a sale," the company said in a statement.
Shares of Electrolux, which sought to double its U.S. sales with the purchase, tumbled on the news, and the company said it will now focus on developing existing brands such as Frigidaire, Kenmore and Tappan and could look at other acquisitions.
The U.S. Justice Department had filed a lawsuit in July asking a judge to stop the deal, arguing that it would push appliance prices up by 5 percent. Electrolux, GE and larger competitor Whirlpool (WHR.N: Quote) make up more than 90 percent of major kitchen appliances sold to homebuilders, according to the lawsuit.
"This deal was bad for the millions of consumers who buy cooking appliances every year. Electrolux and General Electric could not overcome that reality at trial," said Deputy Assistant Attorney General David Gelfand of the department’s Antitrust Division.
This has been a year of megadeals but also a year of aggressive deals killed by equally aggressive U.S. antitrust authorities.
Dead deals include Comcast's (CMCSA.O: Quote) bid to buy Time Warner Cable TWC.N, Sysco's SYY.N plan to buy US Foods, Thai Union's plan to buy Bumble Bee tuna and Applied Materials' (AMAT.O: Quote) scrapped plan to merge with Tokyo Electron (8035.T: Quote). Continued...