GE calls off sale of appliances business to Electrolux
General Electric has walked away from a $3.3 billion agreement reached in September 2014 to sell its appliances business to Sweden’s Electrolux, terminating the deal after months of opposition from US competition regulators.
The proposed acquisition was announced on September 8, 2014. As previously communicated, on July 1, 2015 the US Department of Justice sued Electrolux and GE to stop the proposed acquisition.
GE 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 US 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.
“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”, said Keith McLoughlin, President and CEO of Electrolux.
Electrolux, GE and larger competitor Whirlpool make up more than 90% of major kitchen appliances sold to homebuilders, according to the lawsuit. The acquisition of GE’s appliance business would have seen Electrolux leapfrog Whirlpool as the world’s biggest appliances maker, strengthening its position in North and South America.
This has been a year of megadeals but also a year of aggressive deals killed by equally aggressive US competition authorities.
In 2014, Electrolux made around 33% of its 112 billion crowns ($13.2 billion) of sales in North America compared to around 35% in Europe.
Before the GE deal was announced, Electrolux had been looking to buy into growth in emerging markets, a strategy it may now revisit.
GE is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect.
Electrolux is a global leader in household appliances and appliances for professional use, selling more than 50 million products to customers in more than 150 markets every year.
