General Electric took what Bloomberg Business dubbed “the unusual step” of issuing a public statement yesterday to try to get ahead of reported regulatory opposition to the $3.3 billion sale of its appliance business to Swedish firm Electrolux.
In the statement, GE also announced that the original timeline for closing the deal has been pushed back.
Citing an unnamed source “familiar with the matter,” as is common in reporting about deals at this level, Bloomberg Business reported earlier today that attorneys with the antitrust division of the Department of Justice have raised concerns about the deal in its current form. It is possible the two companies could negotiate a settlement to mollify regulators, the source told Bloomberg, leaving out specifics.
If Electrolux acquires the business, it would control 40 percent of the North American market, becoming peers with industry leader Whirlpool Corp. of the U.S.
GE Appliances includes Louisville’s own massive GE Appliance Park, which employs more than 6,000 people here. The entire appliance division at GE employs 15,000.
If regulators scuttled the deal, GE would be left with a division that is not a particularly large, nor particularly profitable, part of its overall corporate structure. It would also deny GE the chance to profit handsomely from the sale of the division to Electrolux, which desperately wants it.
As IL reported when the sale was announced in September, appliances and lighting accounted for only about 6 percent of the company’s $146 billion in 2013 revenue.
From GE’s public statement:
“GE announced today that the regulatory review for the sale of its Appliances business to Electrolux continues. As a result, the deal will not close during the second quarter of this year. Electrolux and GE continue to work actively with the Department of Justice to endeavor to resolve the remaining items in the clearance process, with the goal of closing the deal in 2015 … GE continues to believe that GE Appliances’ customers, consumers and employees will benefit from Electrolux’s commitment to the appliance business and its ability to compete with global competitors.”
A GE spokesman declined additional comment. IL also contacted an Electrolux spokeswoman for comment, but she did not immediately respond.