General Electric Company (GE) will not sell its appliance business to Sweden’s Electrolux AB, the companies announced in statements released Monday. The announcement comes amid an ongoing legal battle with the U.S. Justice Department to get the acquisition approved.
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer,” Electrolux President and CEO Keith McLoughlin said, in the statement.
Under the terms of the deal -- valued at $3.3 billion -- Electrolux is now required to pay GE a termination fee of $175 million.
The purchase of GE’s appliance business was expected to more than double Electrolux's sales in the U.S. market, from the $4.5 billion it had in 2013, according to media reports. However, following the announcement of the deal in September, both companies were sued by the U.S. Department of Justice, which argued that the deal would give the company an unfair advantage in the U.S. appliance market and raise prices by up to 5 percent.
In October, the justice department rejected Electrolux’s offer to sell assets in order to resolve the antitrust dispute, claiming that the offer fell “well short” of replacing the competition that would be lost as a result of the deal.
In early trade on Stockholm stock exchange Monday, Electrolux's shares plummeted at the open, dropping nearly 13 percent.