- Swedish manufacturer disagrees with U.S. on appliance deal
- Company isn't having settlement talks with Justice Department
Electrolux AB would have to sell its entire U.S. business to resolve a federal lawsuit seeking to block the planned $3.3 billion takeover of General Electric Co.’s household appliance business, according to a lawyer for the Swedish manufacturer.
“I’m convinced the only proposal, the only remedy, the government would find acceptable would be for Electrolux to essentially divest itself of its entire business in the United States,” Joe Sims, a partner at Jones Day in Washington, said Thursday on a conference call with reporters. “That obviously would not be a solution that would preserve the value of the transaction.”
Electrolux shares fell 0.3 percent to 234.70 kronor as of 09:22 a.m. on Friday in Stockholm. The drop extended a 3.1 percent decrease to 235.5 kronor before the Thursday close after Sims outlined the company’s aim to fight the case in a trial set to start Nov. 9 in federal court in Washington.
The U.S. Justice Department’s antitrust division argues that the deal would raise prices and rejected an Electrolux settlement proposal.
Electrolux is confident in the merits of its case and notes the DoJ hasn’t outlined what it would take for them to accept the deal, company spokesman Paul Palmstedt said by telephone.
(Correction: An earlier version of this story that appeared on the web contained an unrelated quote that has been removed.)
“Joe Sims talks about his view on how the DoJ sees this, based on 40 years of experience,” Palmstedt said. “That’s his picture of how he thinks they see this.”
GE’s appliance business would add brands such as Hotpoint to an Electrolux lineup that includes AGE stoves and Frigidaire refrigerators. The U.S. company is moving away from consumer goods and lending to focus on industrial products such as locomotives and jet engines and agreed to the sale in September 2014.
Sims said Electrolux made a “very significant offer” that would have given a leading global producer a strong position in the U.S. He declined to name the company.
“There are no settlement talks under way,” he said. “There is no additional settlement being considered.”
Mark Abueg, a Justice Department spokesman, declined to comment about Sims’s remarks. A government lawyer said in court Oct. 30 that the Electrolux settlement proposal fell short of replacing lost competition from the combination.
GE didn’t immediately comment on Sims’s observations. Chief Executive Officer Jeffrey Immelt told analysts on an Oct. 16 conference call that the company still expected the appliance deal to close in the fourth quarter. GE slid 0.10 percent to $29.51 in New York.