General Electric (“GE”) has notified Electrolux that it has terminated the agreement pursuant to which Electrolux had agreed to acquire the appliance business of GE. The termination is effective as of December 7, 2015. Therefore, the transaction will not be completed.
The proposed acquisition was announced on September 8, 2014. As previously communicated, on July 1, 2015 the US Department of Justice (“DOJ”) sued Electrolux and GE to stop the proposed acquisition.
Electrolux has made extensive efforts to obtain regulatory approvals, and regrets that GE has terminated the agreement while the court procedure is still pending. Electrolux considers that the settlement proposals that were offered to DOJ were reasonable and would have addressed DOJ’s competition concerns. Unfortunately, these proposals were rejected by DOJ.
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer”, said Keith McLoughlin, President and CEO of Electrolux.
“The strategy to grow profitably in promising segments, product categories and emerging markets remains. The Group’s operations in North America have proved to be strong on its own merits, with good organic growth and a recovery in earnings during 2015. Major Appliances North America has a strong presence in the US under the brands Frigidaire and Electrolux, and we are confident that this position will be maintained and strengthened.”
Electrolux aims at growing its operations globally, both organically and through acquisitions, which is supported by a strong balance sheet and good cash generation.
Under the transaction agreement, Electrolux is required to pay to GE a termination fee of USD 175m under certain circumstances. GE has requested pay-out of the amount.
For the period January – September 2015, transaction costs related to the acquisition of SEK 266m and cost for preparatory integration work of SEK 136m have been charged. For the fourth quarter 2015, transaction costs and integration costs are expected to amount to approximately SEK 175m. The results for the fourth quarter 2015 will also be impacted by costs arising from the bridge facility of approximately SEK 225m.
Investor and media conference today
The investor, analyst and media conference will begin at 9.00 CET on Monday, December 7. The conference will be chaired by Keith McLoughlin, President and CEO of Electrolux. Mr. McLoughlin will be accompanied by Tomas Eliasson, CFO.
Details for the call are as follows:
- Participants in Sweden should call + 46 8 5033 6538
- Participants in the UK/Europe should call +44 20 3427 1901
- Participants in the U.S. should call +1 646 254 3366
For further information, please contact:
- Catarina Ihre, Vice President Investor Relations at 46 (0)8 738 60 87
- Electrolux Press Hotline, 46 8 657 65 07.
Electrolux discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 CET on December 7, 2015