Electrolux said today its deal to buy General Electric’s appliance business had fallen through after GE terminated the $3.3 billion agreement.
The U.S. Department of Justice asked a federal court in July to stop Electrolux, which makes Frigidaire, Kenmore and Tappan appliances, from buying GE’s appliance business and has said the deal would push prices up by five percent.
Electrolux had argued that the US authorities had already approved a similar deal between Whirlpool and Maytag in 2006 without triggering higher prices.
“Electrolux has made extensive efforts to obtain regulatory approvals, and regrets that GE has terminated the agreement while the court procedure is still pending,” Electrolux said in a statement.
Keith McLoughlin, president and chief executive of Electrolux, said: “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.”
Electrolux said that under the transaction agreement, it is required to pay a termination fee of $175 million under certain circumstances. It said GE had requested pay-out of that amount.
Shares of Electrolux plummeted 14% at the open after it said its deal to buy General Electric’s appliance business had fallen through after GE terminated the $3.3 billion agreement.
