The U.S. Department of Justice (“DOJ”) has announced that it will seek to stop the acquisition of GE Appliances proposed by Electrolux. On September 2014, the company announced it had entered into an agreement to acquire GE Appliances for a cash consideration of USD 3.3 billion. Electrolux does not agree with the DOJ’s assessment that the acquisition will harm competition. “Electrolux – the company explains in a offical note – 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 finds DOJ’s opposition to be wholly 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 company remains confident in its assessment of the competitive merits of this transaction and its favorable impact on consumers, and Electrolux therefore still expects the transaction to close in 2015. The transaction is expected to generate annual cost synergies of approximately USD 350 million. The largest are expected to come from sourcing, operations and logistics.
The review of the proposed acquisition will now continue in a court procedure.
