STOCKHOLM (Reuters) – Sweden's Electrolux said on Monday its deal to buy General Electric's appliance business had fallen through after GE terminated the $3.3 billion (2.1 billion pound) agreement with shares in Electrolux expected to fall sharply when they open.
The U.S. Department of Justice asked a federal court in July to stop Electrolux, which makes Frigidaire, Kenmore & Tappan appliances, from buying GE's appliance business & has said the deal would push prices up by five percent.
"Electrolux has made extensive efforts to obtain regulatory approvals, & regrets that GE has terminated the agreement while the court procedure is still pending," Electrolux said in a statement.
Electrolux said its strategy to grow profitably in promising segments, product categories & emerging markets was unchanged.
"The Group's operations in North America have proved to
be strong on its own merits, with satisfactory organic growth & a recovery in earnings during 2015," it said.
The U.S. agency has argued that Electrolux & GE, along with Whirlpool Corp , make 90 percent of the stoves & ovens sold to huge builders & property managers in the United States.
The department said the proposed deal violates U.S. antitrust law.
"I think the share (Electrolux) will fall at least 10 percent," said Jonas Olavi, analyst at Alfred Berg.
Electrolux maintains that companies such as Samsung & LG Electronics are moving into the U.S. market for appliances, diluting its market power.
Electrolux said it was prepared to divest assets to appease the DOJ.
"Unfortunately, these proposals were rejected by DOJ," Electrolux said.
Electrolux said that â€under the transaction agreement, it is required to pay a termination fee of $175 million under certain circumstances. It said GE had requested pay-out of that amount.
Electrolux will hold a press conference at 0800 GMT.â€‹
(Reporting by Stockholm Newsroom; editing by Alistair Scrutton)