Electrolux drops over 10% after GE deal falls through
Print Edition
SHARES in Sweden's Electrolux slumped more than 10 percent yesterday after a US$3.3 billion deal to buy General Electric's appliance business fell through.
Announcing the deal in autumn last year, Electrolux said its biggest ever acquisition would double its sales in the United States and step up the challenge to arch rival Whirlpool in the world’s largest appliance market.
But the US Department of Justice said the deal would reduce competition and drive up prices, and asked a federal court in July to stop it from going ahead.
Electrolux, which makes Frigidaire, Kenmore and Tappan appliances, and the DOJ were arguing in court when GE pulled the plug, leaving the Swedish firm's US strategy in tatters.
“It is a major disappointment for Electrolux,” said Handelsbanken Capital Markets analyst Karri Rinta.
Shares in Electrolux fell 11.9 percent at 210.5 crowns (US$24.61) at 1030 GMT, the biggest fall by a European blue-chip stock.
“We’re disappointed but we’re certainly not defeated,” Electrolux Chief Executive Keith McLoughlin told a conference call.
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