Antitrust Lawyer Blog
On December 7, 2015, after four weeks of trial in the U.S. District Court of the District of Columbia, GE terminated its $3.3 billion sale of its appliance business to Electrolux.
In September of 2014, Electrolux announced its acquisition of GE’s appliance business. The deal was characterized as a way to make Electrolux more competitive with Whirlpool and allow GE to simplify its business, focusing on technology and infrastructure.
However, on July 1, 2015, the DOJ brought a law suit to challenge Electrolux’s $3.3 billion acquisition of GE’s appliance business because as alleged the deal would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the United States. Generally, the DOJ alleged that the deal would eliminate competition that benefits American consumers and home builders who buy cooking appliances adn that the deal would result in higher prices and less options. More specifically, the DOJ’s main antitrust concerns focused on appliances such as ranges, cooktops and wall ovens sold to “contract-channel” purchasers. According to the complaint, contract-channel purchasers are single-family homebuilders, multifamily homebuilders, property managers of apartments and condominiums, hotels and governmental entities who individually negotiate contracts for major cooking appliances with suppliers like GE and Electrolux. The DOJ alleged that GE, Electrolux and Whirlpool are the three biggest suppliers in this contract-channel market, accounting for more than 90 percent of sales.