Electrolux Contests DOJ’s Opposition to the Acquisition of GE Appliances
July 2, 2015
The U.S. Department of Justice (DOJ) has announced that it will seek to stop Electrolux proposed acquisition of General Electric (GE). Electrolux is contesting this effort by the DOJ to oppose the transaction. The review of the proposed acquisition will now continue in a court procedure.
On September 8, 2014, Electrolux announced it had entered into an agreement to acquire GE Appliances, a well-known manufacturer of kitchen and laundry products in the United States, for a cash consideration of $3.3 billion.
Electrolux says it does not agree with the DOJ’s assessment that the acquisition will harm competition. Electrolux believes the acquisition will increase competition and provide consumers access to a greater choice of high quality products at a wider range of competitive prices. The acquisition is intended to enhance Electrolux scale and efficiencies in order to invest more in innovation and growth for the benefit of all consumers, retailers, employees and shareholders. Electrolux also claims that the DOJ’s opposition is inconsistent with its 2006 decision to approve Whirlpool’s acquisition of Maytag – at the time one of Whirlpool’s major competitors on the U.S. home appliance market.
“The appliances industry is more competitive than ever,” said Keith McLoughlin, president and CEO of Electrolux. “We believe this acquisition accelerates consumer innovation, which improves the industry as a whole, and results in more consumer choice than ever.”
Electrolux has already obtained regulatory approval in Brazil, Canada and Ecuador. The transaction is subject to filing requirements in a few more countries in Latin America. The transaction is expected to generate annual cost synergies of approximately $350 million. The largest are expected to come from sourcing, operations and logistics.