General Electric will no longer sell its home appliances division to Sweden's Electrolux, which in September 2014 presented a $3,3 billion offer. The closure of the deal was announced today by the American group. In Stockholm, the Electrolux stock collapsed, losing 15% before recovering around -12%. The household appliance company is present in Italy with 6 employees and also with the AEG, Zanussi and Frigidaire brands. Ge's decision follows pressure from the US Antitrust which sees the merger as an obstacle to competition due to the excessive concentration in the household appliances sector that would result.
GE claims to be entitled to an indemnity of 175 million dollars from the Swedes for breaking off the negotiations and specifies that it remains willing to get rid of the appliance division even if the latter is performing well. At Electrolux, the only reaction to GE's announcement for now is that of “disappointment” with the decision taken by the other party.
The acquisition was announced on September 8, 2014, but the Department of Justice essentially blocked the sale despite efforts by the parties to obtain all necessary regulatory approvals.
Electrolux paid SEK 266 million between January and September for this operation, plus SEK 136 million for the preparatory phase.
In the fourth quarter for the Swedish home appliance giant, integration and transaction costs are expected to amount to approximately SEK 175 million and the period will also be impacted by costs of approximately SEK 225 million deriving from the activation of a loan bridge.
