Electrolux’s proposed $3.3 billion acquisition of GE’s appliance business may be facing a critical roadblock as the Department of Justice (DOJ) digs its antitrust heels in even deeper, according to reports.
Bloomberg, in a one-line news flash, claims the DOJ now wants Electrolux to divest its entire U.S. business before the deal can go through, while Reuters is reporting that any chance of a negotiated settlement is unlikely.
Instead, the manufacturer will meet the federal regulators in court next week to fight an antitrust suit, which contends that the acquisition will create a commercial and cooking appliance duopoly, given GE’s strength in the homebuilders’ channel and both vendors’ significant market share in ovens.
“There are no settlement talks under way,” Electrolux attorney Joe Sims told Reuters. “There is no additional settlement being considered.”
Word of the impasse dashes Electrolux president/CEO Keith McLoughlin’s hopes for “a reasonable settlement,” which he expressed with the company’s third-quarter earnings release last month.
Instead, senior VP Frank Wagner reiterated the company’s contention to Bloomberg that DOJ has an “incomplete understanding of how appliances are manufactured and sold” in the U.S., given the aggressive inroads by Asian manufacturers LG, Samsung, Haier and Arcelik/Blomberg.
The two sides will go to trial on Nov. 9.