$3.3bn sale falls through following Department of Justice intervention
US appliance brand General Electric has called off the $3.3bn sale of its business to Electrolux, but under the transaction agreement will still receive the payment of a termination fee of USD 175million.
However GE is continuing to look for a new owner, following its statement: “The appliances business is performing well and GE will continue to run the business while it pursues a sale”
The termination follows the opposition from the Department of Justice on July 1, which sued Electrolux and GE to stop the acquisition.
According to the Swedish appliance manufacturer, the company considered the settlement proposals offered to the DOJ were “reasonable and would have addressed DOJ’s competition concerns. However, these proposals were rejected.
Acccording to Reuters, the acqusiton of GE would have seen Electrolux topple Whirlpool as the the world’s biggest appliance manufacturer and strengthen its position in North and South America.
President and CEO of Electrolux Keith McLoughlin commented: “Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer.”
He continued: “The strategy to grow profitably in promising segments, product categories and emerging markets remains. The Group’s operations in North America have proved to be strong on its own merits, with good organic growth and a recovery in earnings during 2015. Major Appliances North America has a strong presence in the US under the brands Frigidaire and Electrolux, and we are confident that this position will be maintained and strengthened.”