U.S. sues to stop Electrolux acquiring GE's appliance business
By Diane Bartz and Lewis Krauskopf
WASHINGTON (Reuters) - The United States filed a lawsuit on Wednesday to stop Sweden's Electrolux AB (ELUXb.ST: Quote), which owns the Frigidaire, Kenmore and Tappan brands, from buying General Electric Co's (GE.N: Quote) appliance business, the Justice Department said in a statement.
It said the $3.3 billion deal would hurt competition, and consumers, by combining two of the three top makers of stoves, cooktops and ovens. Whirlpool Corp (WHR.N: Quote), which bought Maytag in 2006, is the third.
Electrolux shares traded in the U.S. ELUXY.PK on the OTC Pink market fell 9.3 percent, with more than 40,000 shares exchanged. GE's share price was steady.
GE, which also has the Hotpoint brand and sells almost exclusively in the United States, said in a statement that its goal remained to close the deal in 2015. "Electrolux and GE intend to vigorously defend the proposed acquisition," the company said in a statement.
In its complaint, the Justice Department said that Whirlpool, GE and Electrolux had 90 percent of the U.S. market for stoves and ovens.
Leslie Overton, a deputy assistant attorney general at the Justice Department's Antitrust Division, said the Electrolux deal would lead to higher prices for consumers.
"This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers," she added.
But Electrolux disagreed. Its antitrust attorney Joe Sims argued that LG, Samsung and others were moving into the market to challenge the Big Three. Continued...