United States Sues to Block GE Appliance Business Sale to Electrolux
California — Jul 1, 2015, 1:10 PST
The U.S. government is seeking to stop Electrolux from buying General Electric's appliance division, saying the combined company would dominate sales of kitchen appliances to customers like home builders, property managers, hotels, and governments.
General Electric Co. says it will defend the sale in court and aims to complete the $3.3 billion deal this year. The companies announced the sale in September.
The U.S. Department of Justice has filed suit asking a U.S. District Court in Washington, D.C., to block the sale. It says GE and Electrolux, the owner of the Frigidaire brand, have been competing for many years to sell appliances like ranges, cooktops, and wall ovens.
The agency says Electrolux would eliminate a major competitor if it buys the GE division, and Electrolux and Whirlpool would be the only major companies selling appliances to many customers.
The Justice Department said the deal would be bad news for buyers of major cooking appliances. It is most concerned about "contract channel" sales, where suppliers sell to homebuilders, to the builders and managers of apartment buildings and condominiums, hotels and motels; and to governments. It said Electrolux has made significant efforts to win more contract channel business over the last decade but is now seeking to acquire GE's business instead of competing with it.
Electrolux Corp based in Stockholm and the deal would be its largest acquisition ever. Electrolux currently ranked as the world's second-biggest home appliance maker after Whirlpool.
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