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Earlier, the US Government has refused to let Electrolux purchase General Electric’s division for production of household appliances. The Ministry of Justice did not see competition for the Swedish manufacturer on the US market, and intended to prevent the transaction worth $ 3.3 billion through the court.
Swedish Electrolux AG and American General Electric Co. could not coax the US government. The governmental body is still sure that the deal, intended to combine the companies’ household goods division, would not lead to a violation of antitrust laws. According to The Wall Street Journal, the government considered the manufacturers’ appeal to restructure the transaction "woefully inadequate".
Recall that in September 2014, Electrolux agreed with GE to buy its business related to the production of household appliances. The transaction value was estimated at $ 3.3 billion. However, in July last year, it became known that the US Department of Justice filed a complaint in US District Court in Washington, asking to block the deal. According to the authorities, GE’s withdrawal from the market would leave virtually no competition for Electrolux and Whirpool. This would inevitably lead to higher prices in the market. This was considered especially true for kitchen stoves and ovens, according to the claim handling. Now, total share of Electrolux, GE and Whirpool accounts for approximately 90% of the market.
GE, in turn, continues to insist that the US authorities were not able to adequately assess the market and did not see the whole picture. In particular, during a conference call discussing results of the third quarter of 2015, which was held in mid-October, CEO of GE Jeff Immelt said "household appliances is a highly competitive market, where at least seven producers, and 21 brand are fighting." At the same time, deal with Electrolux could reduce the number of major players from three to two. Yet in the global market, Electrolux would still continue to withstand serious competition from LG, Samsung, and the Chinese manufacturer Haier.
source: wsj.com
Swedish Electrolux AG and American General Electric Co. could not coax the US government. The governmental body is still sure that the deal, intended to combine the companies’ household goods division, would not lead to a violation of antitrust laws. According to The Wall Street Journal, the government considered the manufacturers’ appeal to restructure the transaction "woefully inadequate".
Recall that in September 2014, Electrolux agreed with GE to buy its business related to the production of household appliances. The transaction value was estimated at $ 3.3 billion. However, in July last year, it became known that the US Department of Justice filed a complaint in US District Court in Washington, asking to block the deal. According to the authorities, GE’s withdrawal from the market would leave virtually no competition for Electrolux and Whirpool. This would inevitably lead to higher prices in the market. This was considered especially true for kitchen stoves and ovens, according to the claim handling. Now, total share of Electrolux, GE and Whirpool accounts for approximately 90% of the market.
GE, in turn, continues to insist that the US authorities were not able to adequately assess the market and did not see the whole picture. In particular, during a conference call discussing results of the third quarter of 2015, which was held in mid-October, CEO of GE Jeff Immelt said "household appliances is a highly competitive market, where at least seven producers, and 21 brand are fighting." At the same time, deal with Electrolux could reduce the number of major players from three to two. Yet in the global market, Electrolux would still continue to withstand serious competition from LG, Samsung, and the Chinese manufacturer Haier.
source: wsj.com
