Swedish firm embroiled in US antitrust lawsuit
Swedish giant Electrolux's attempt to snap up General Electric's appliance business has been met with a lawsuit by US antitrust officials, saying the $3.3 billion deal would harm consumers.
The sale would limit competition and lead to higher prices of cooking appliances for US consumers, said the Justice Department, which filed the civil antitrust lawsuit in a US court in Washington.
The transaction "would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households," said Leslie Overton, a deputy assistant attorney general in the Justice Department's antitrust division.
"This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters."
READ ALSO: Electrolux top boss denies plan to quit Sweden
The GE-Electrolux deal, announced in September 2014, covers a broad range of appliances, including refrigerators, dishwashers, dryers, air conditioners and water heaters.
Cooking appliances comprised the largest share of revenues at 35 percent, according to an Electrolux press release announcing the deal.
GE said it intends to "vigorously" defend the sale to the Swedish appliances giant and that it hopes to close the deal in 2015.
"GE continues to believe that GE Appliances' customers, consumers and employees will benefit from Electrolux's commitment to the appliance business and its ability to compete with global competitors," the company said.
Electrolux, in a separate statement, said it "contests vigorously" the Justice Department position and will fight it in court.
"The appliances industry is more competitive than ever," the company said.
"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."
The company's annual earnings soared to 2.24 billion kronor ($273 million) at the end of last year, following the implementation of a cost-cutting programme which saw about 2,000 workers laid off.
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The sale would limit competition and lead to higher prices of cooking appliances for US consumers, said the Justice Department, which filed the civil antitrust lawsuit in a US court in Washington.
The transaction "would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households," said Leslie Overton, a deputy assistant attorney general in the Justice Department's antitrust division.
"This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters."
READ ALSO: Electrolux top boss denies plan to quit Sweden
The GE-Electrolux deal, announced in September 2014, covers a broad range of appliances, including refrigerators, dishwashers, dryers, air conditioners and water heaters.
Cooking appliances comprised the largest share of revenues at 35 percent, according to an Electrolux press release announcing the deal.
GE said it intends to "vigorously" defend the sale to the Swedish appliances giant and that it hopes to close the deal in 2015.
"GE continues to believe that GE Appliances' customers, consumers and employees will benefit from Electrolux's commitment to the appliance business and its ability to compete with global competitors," the company said.
Electrolux, in a separate statement, said it "contests vigorously" the Justice Department position and will fight it in court.
"The appliances industry is more competitive than ever," the company said.
"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."
The company's annual earnings soared to 2.24 billion kronor ($273 million) at the end of last year, following the implementation of a cost-cutting programme which saw about 2,000 workers laid off.
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