Shares of Electrolux, which sought to double its US sales with the purchase, tumbled on the news, and the company said it will now focus on developing existing brands such as Frigidaire, Kenmore and Tappan and could look at other acquisitions
General Electric on Monday walked away from a $3.3 billion agreement to sell its appliances business to Sweden's Electrolux, terminating the deal after months of opposition from US antitrust regulators.
GE said it would pursue other suitors for its century-old appliance unit but declined to say who they might be.
"The appliances business is performing well and GE will continue to run the business while it pursues a sale," the company said in a statement.
Shares of Electrolux, which sought to double its US sales with the purchase, tumbled on the news, and the company said it will now focus on developing existing brands such as Frigidaire, Kenmore and Tappan and could look at other acquisitions.
The US Justice Department had filed a lawsuit in July asking a judge to stop the deal, arguing that it would push appliance prices up by 5 per cent. Electrolux, GE and larger competitor Whirlpool make up more than 90 per cent of major kitchen appliances sold to homebuilders, according to the lawsuit.
"This deal was bad for the millions of consumers who buy cooking appliances every year. Electrolux and General Electric could not overcome that reality at trial," said Deputy Assistant Attorney General David Gelfand of the department's Antitrust Division.
This has been a year of megadeals but also a year of aggressive deals killed by equally aggressive US antitrust authorities.
Dead deals include Comcast's bid to buy Time Warner Cable, Sysco's plan to buy US Foods, Thai Union's plan to buy Bumble Bee tuna and Applied Materials' scrapped plan to merge with Tokyo Electron.
More mergers are under review including two insurance deals, Aetna's deal for Humana and Anthem's planned merger with Cigna, along with a deal between Baker Hughes and Halliburton and Staples' merger with Office Depot.
At 1400 GMT, Electrolux shares were down 12.9 per cent at 208.3 Swedish crowns, the biggest fall by a European blue-chip stock. They earlier touched a 14-month low of 203.2 crowns. GE was at $30.25 in midmorning trading, down less than one per cent
The acquisition of GE's appliance business would have seen Electrolux leapfrog Whirlpool as the world's biggest appliances maker, strengthening its position in North and South America.
"We're disappointed but we're certainly not defeated," Chief Executive Keith McLoughlin told a conference call.
He said the firm would "continue to have a strong, robust M&A (mergers and acquisitions) process", without elaborating. Some analysts suggested McLaughlin might decide to leave in the face of the deal collapse.
"I'm not sure how much he will enjoy staying on now that what might have been his last deal won't go through," Handelsbanken Capital Markets' Karri Rinta said.
With his family having returned to the United States several years ago, speculation has been rife McLoughlin, who has been CEO for almost five years and imported manufacturing practices from the auto industry to boost profitability, could soon leave.
McLoughlin said in a statement he remained committed to Electrolux and would continue as CEO.
