Business

Electrolux ‘fairly confident’ ahead of trial over GE deal

Electrolux CEO Keith McLoughlin speaks at the Electrolux Capital Markets Day in Charlotte on Nov. 20, 2014. The Swedish appliance maker is fighting a lawsuit by the U.S. Department of Justice, which is seeking to block the company’s planned $3.3 billion acquisition of General Electric’s household-appliance business.
Electrolux CEO Keith McLoughlin speaks at the Electrolux Capital Markets Day in Charlotte on Nov. 20, 2014. The Swedish appliance maker is fighting a lawsuit by the U.S. Department of Justice, which is seeking to block the company’s planned $3.3 billion acquisition of General Electric’s household-appliance business. dhinshaw@charlotteobserver.com

An attorney representing Swedish appliance maker Electrolux said the company is “fairly confident” in the merits of its case as it goes to court next week against the U.S. Justice Department over its deal with General Electric.

A trial is set to begin Monday in federal court over Electrolux’s proposed $3.3 billion acquisition of GE’s household-appliance business. The Justice Department is suing to block the deal over antitrust concerns.

The lawsuit goes to trial after the government last week rejected a settlement offer from Electrolux, which has its North American headquarters in Charlotte, to divest certain assets.

“It’s my belief that the only settlement that they would find acceptable here would be for Electrolux to divest essentially all of their existing U.S. business,” Joe Sims, a partner at the Jones Day law firm, told reporters on a conference call Thursday.

Sims said that option would not have been acceptable to Electrolux “because it would destroy the efficiencies and synergies they had hoped to get out of this transaction.” He declined to detail Electrolux’s offer, citing confidentiality agreements.

Justice Department spokesman Mark Abueg declined to comment Thursday, citing department policy not to remark on pending matters.

Electrolux agreed in September 2014 to acquire GE’s Louisville, Ky.-based appliances unit, as the Connecticut-based industrial conglomerate sheds consumer-focused businesses. Stockholm-based Electrolux has argued the deal would increase competition and give consumers more access to competitive prices.

The Justice Department, however, moved to block the deal, filing a civil lawsuit in Washington, D.C., in July. The government has said the deal, which combines two leading manufacturers of ranges, cooktops and wall ovens sold in the U.S., would eliminate competition and leave millions of Americans vulnerable to price increases for such products.

In a statement Wednesday, Electrolux argued that it is easy for manufacturers in similar industries to become appliance makers, and that foreign companies such as Samsung already “have aggressively invested and expanded into the U.S. appliance business.”

Electrolux has also said the Justice Department’s opposition to the acquisition is “wholly inconsistent” with the government’s 2006 decision to approve Whirlpool’s acquisition of Iowa-based Maytag, a home and commercial appliance manufacturer.

Sims said it is very unusual for antitrust cases to go to trial. Usually, companies either win government approval, strike settlements to divest assets or back away from deals in the face of government opposition.

Earlier this year, Comcast dropped plans for its $45 billion purchase of Time Warner Cable following government opposition.

Electrolux employs about 900 people at the operation on David Taylor Drive in the University City area. CEO Keith McLoughlin has said the headquarters will remain in Charlotte after the GE deal, but the company is determining whether to move ahead with a planned expansion to double the Charlotte headquarters’ size.

Deon Roberts: 704-358-5248, @DeonERoberts

  Comments