General Electric said Monday that it is backing out of a plan to sell its appliance division to Electrolux for $3.3 billion. The Justice Department sought to block the deal.
GE has asked to be paid a $175 million breakup fee, both companies said.
It would have been the biggest acquisition ever for Electrolux, the Swedish manufacturer with its North American headquarters in Charlotte, N.C. The deal would have made Electrolux surpass Whirlpool as the world’s largest appliance maker.
Electrolux said it made “extensive efforts to obtain regulatory approvals from the Justice Department, and regrets that GE has terminated the agreement.”
Electrolux agreed in September 2014 to acquire GE’s Louisville, Ky.-based appliance unit. But this summer, the Justice Department sued, saying the merger would result in the companies dominating the U.S. cooking appliance market, alongside competitor Whirlpool, and creating what’s known as a duopoly.
For consumers, that would mean higher prices on appliances, federal authorities said.
“We disagree with the Department of Justice’s narrow view on a transaction that would have benefited consumers. The appliances market is dynamic and highly competitive,” GE spokesman Seth Martin said in an emailed statement.
In court last month, Electrolux’s McLoughlin testified that his company would be able to keep costs down and sell products at lower prices under the GE acquisition.
The Swedish manufacturer sells appliances under the brand names Frigidaire, Tappan and Electrolux, while GE uses a number of names including GE Monogram, GE Cafe and well as Hotpoint.
“This deal was bad for the millions of consumers who buy cooking appliances every year,” the Justice Department said in a statement following the collapse of the deal. “Electrolux and General Electric could not overcome that reality at trial.”
GE will seek an alternative buyer for the appliance division, which is “performing well,” the Fairfield, Conn.-based company said in a statement.