Electrolux faces US court over €3bn appliance plan

As Electrolux prepares to fight in court to buy General Electric’s assets, the Swedish home appliance maker may prefer to sell brands than factories if it tries to reach a settlement to salvage the $3.3bn(€3.07bn) deal before the judge’s verdict.

To satisfy US Department of Justice opposition to the agreement, a sale of manufacturing sites “would be a commercial nightmare,” said Handelsbanken analyst Karri Rinta.

Selling GE oven brands makes more sense although it might be “insufficient”.

The DoJ has argued that Electrolux’s planned takeover of GE’s appliance business would leave some buyers only two options for their cooking purchases: Electrolux and Whirlpool.

DoJ has argued the deal will lead to a duopoly in the supply of major appliances because GE, Electrolux and Whirlpool have a combined 90% of the market for so-called contract buyers.

Opening statements today in the DOJ case against Electrolux-GE Appliances deal. https://t.co/7I3ggNe2wQ pic.twitter.com/19hDcm5e3e

— Business First (@BFLouisville) November 9, 2015

Electrolux chief executive Keith McLoughlin is counting on the acquisition unveiled more than a year ago to rival Whirlpool for the top spot in the US appliance market.

Analysts say it is likely a court verdict will decide the fate of the deal, though the Swedish company may still propose remedies to assuage antitrust concerns.

The sale of brands such as GE’s Hotpoint and Monogram make “more sense”, said Handelsbanken.