Electrolux will reduce costs at its small appliance division to save an expected 120 million kronor (€12.9m) annually starting at the end of next year.
Costs related to the programme will amount to 190m kronor, with staff reductions and reduced operations in the US, Sweden and China.
The plan comes because of “reduced volumes in several key markets” and currency fluctuations, the company said.
When completed, the small appliance business will be able to invest in profitable products.
The GE deal would have allowed Electrolux to better compete with Whirlpool and Asian manufacturers.
GE said it was abandoning the deal because of opposition from US regulators, who had sued to block the transaction.
Electrolux will pay GE a breakup fee of $175m, and transaction and integration costs from the failed deal will be about 175m kronor in the fourth quarter.
Expenses related to a bridge loan will be 225m kronor, the company said.
But due to the collapse of the deal with GE there was speculation that current Electrolux CEO, Keith McLoughlin, may have an untenable position and be forced to exit the position that he holds. However this week there have been several reports that this is unlikely to happen.
“I think he can stay,” Ronnie Leten told a Swedish news agency at a conference this week. “Keith McLoughlin’s position is completely independent of what happened with GE.”
“Electrolux has put a lot of time, money and prestige into this deal,” Mattias Eriksson, chief strategist at Nordea, told the Wall Street Journal this week. “As the company goes back to the drawing board it might be a natural time to switch chief executive.”
Electrolux has said it will now focus on research and development for new products while keeping its eyes open for new acquisitions. The company has said it plans to keep its North American headquarters in Charlotte
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that (it) has strong capabilities to continue to grow and develop its position as a global appliances manufacturer,” McLoughlin said earlier this week.
