Electrolux CEO seeks to rescue GE deal after legal blow
By Sven Nordenstam
STOCKHOLM (Reuters) - The head of Sweden's Electrolux (ELUXb.ST: Quote) said he believed a $3.3 billion deal to buy the GE Appliances (GE.N: Quote) business could be salvaged after the United States moved to block it.
The U.S. Justice Department filed a lawsuit on Wednesday to stop the purchase, arguing that it would hurt competition in the market for cooking appliances.
The deal would be the biggest in the Swedish company's history and more than double its annual U.S. sales. Electrolux CEO Keith McLoughlin wants to preserve as much of it as he can.
"I don't see a scenario where, for either party, it would make much sense to split the baby," said McLoughlin, who is an American.
He remained confident that the deal could still be completed by the end of the year, even though talks on remedies with the Department of Justice (DOJ) had so far been unsuccessful. Analysts said disposals might help to settle the dispute.
The Justice Department said the deal would be likely to hurt consumers through higher prices on major cooking appliances.
It also said it would create a duopoly in the supply of these products to buyers such as home builders and property managers. Electrolux, GE and rival Whirlpool WHR.N had a combined market share of 90 percent in this segment, it said.
"We don't agree with their numbers and we will show numbers that are different than that," said McLoughlin, whose company makes appliances under brands such as Frigidaire and Zanussi as well as its own. Continued...