On September 8, 2014, Electrolux announced it had entered into an agreement with General Electric (“GE”) to acquire GE Appliances, a well-known manufacturer of kitchen and laundry products in the United States, for a cash consideration of USD 3.3 billion.
On July 1, 2015, the US Department of Justice (“DOJ”) announced that it seeked to stop the proposed acquisition. The review of the proposed acquisition continued in a court procedure and the trial begun on November 9, 2015. Electrolux did not agree with the DOJ’s assessment that the acquisition will harm competition.
On December 7, 2015, GE notified Electrolux that it had terminated the agreement pursuant to which Electrolux had agreed to acquire the appliance business of GE. Therefore, the transaction will not be completed. Electrolux has made extensive efforts to obtain regulatory approvals, and regrets that GE has terminated the agreement while the court procedure was still pending.
In accordance with the terms of the transaction agreement, Electrolux paid on December 9, 2015, a termination fee of USD 175m, corresponding to SEK 1,493m, to General Electric. Transaction costs related to the acquisition of SEK 408m and cost for preparatory integration work of SEK 158m have been charged to operating income for 2015 and the finance net has been impacted by costs arising from the bridge facility of SEK 187m.
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In April, 2015, Kenneth L. Ng, former CEO of Lixil Corporation in Greater China, joined Electrolux as new head of Major Appliances Asia/Pacific. He succeeded Gunilla Nordström who has left the Group.
In April, 2015, Jack Truong, former Head of Major Appliances North America, decided to resign from his position. Electrolux President and CEO Keith McLoughlin was acting as interim Head of Major Appliances North America until he retired in January 2016.
In January, 2016, Keith McLoughlin notified the Board of Directors of Electrolux that he wished to retire from Electrolux. Jonas Samuelson was appointed by the Board as new President and CEO of Electrolux as of February 1, 2016. Mr. Samuelson has previously been Head of the business area Electrolux Major Appliances Europe, Middle East and Africa, Head of Electrolux Global Operations and Group Chief Financial Officer. Jonas Samuelson joined Electrolux in 2008.
In January 2016, Daniel Arler was appointed new Head of Major Appliances Europe, Middle East and Africa and Alan Shaw was appointed new Head of Major Appliances North America. Daniel Adler has since 2012 been Senior Vice President of the Kitchen product line within EMEA. He has been with Electrolux since 2002. Alan Shaw’s most recent position was President of Husqvarna AB’s Consumer Brands division.
In January 2016, Tomas Eliasson, Chief Financial Officer, decided to resign from Electrolux in order to pursue an external opportunity. He will remain with the company for up to six months. A process to recruit a successor has been initiated.
Litigation and claims related to asbestos are pending against the Group in the US. Almost all of the cases refer to externally supplied components used in industrial products manufactured by discontinued operations prior to the early 1970s. The cases involve plaintiffs who have made substantially identical allegations against other defendants who are not part of the Electrolux Group.
As of December 31, 2015, the Group had a total of 3,259 (3,070) cases pending, representing approximately 3,326 (approximately 3,129) plaintiffs. During 2015, 1,283 new cases with 1,291 plaintiffs were filed and 1,094 pending cases with approximately 1,094 plaintiffs were resolved.
The Group continues to operate under a 2007 agreement with certain insurance carriers who have agreed to reimburse the Group for a portion of its costs relating to certain asbestos lawsuits. The agreement is subject to termination upon 60 days notice and if terminated, the parties would be restored to their rights and obligations under the affected insurance policies.
It is expected that additional lawsuits will be filed against Electrolux. It is not possible to predict the number of future lawsuits.
In addition, the outcome of asbestos lawsuits is difficult to predict and Electrolux cannot provide any assurances that the resolution of these types of lawsuits will not have a material adverse effect on its business or on results of operations in the future.
For information on certain additional legal proceedings, see Note 25 Contingent liabilities.