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Appliances

Justice Department tries to freeze GE-Electrolux appliance deal

US regulator sues to stop a big appliance merger that it claims could push up prices and cut back options for consumers.

The battle over GE's ovens heats up. CNET

General Electric's plans to unload its iconic appliances business for $3.3 billion may short circuit.

The Department of Justice on Wednesday filed an antitrust suit to block the conglomerate's planned sale of GE Appliances -- which includes refrigerators, ovens and dishwashers -- to Swedish appliance maker Electrolux. The regulator argued that a combination of the two appliance businesses would reduce competition and options for consumers, particularly because both businesses are leading manufacturers of cooktops, ranges and wall ovens sold in the US.

The proposed deal "would leave millions of Americans vulnerable to price increases for ranges, cooktops and wall ovens, products that serve an important role in family life and represent large purchases for many households," Leslie C. Overton, deputy assistant attorney general of the Justice Department's Antitrust Division, said in a statement Wednesday.

The Justice Department said it also wanted to prevent a duopoly in the US for cooking appliances, a reference to consumers having only two major options in Electrolux or Whirlpool if the deal goes through.

If the deal falls apart, it will be a blow to both GE and Electrolux. GE has been considering selling its appliances business for years, so it can focus on its higher-profit industrial units, such as aviation as well as power and water. For Electrolux, the deal -- which was announced in September and expected to close this year -- would make it a much bigger name with US consumers as well as a stronger competitor against Whirlpool.

Because of those benefits, both GE and Electrolux sent out separate statements Wednesday saying they would both "vigorously" defend the tie-up.

"We believe this acquisition accelerates consumer innovation," said Electrolux CEO Keith McLoughlin, "which improves the industry as a whole, and results in more consumer choice than ever."

His company also said the Justice Department's opposition was "wholly inconsistent" with its 2006 approval of Whirlpool's acquisition of Maytag -- which had been two major competing US home appliances brands.

In a short statement, GE said: "Our goal remains to close the deal this year."

Over the past few years, the Justice Department has repeatedly prevented head-to-head competitors in the US market from merging, with the latest major example being its involvement in squashing Comcast's $45.2 billion deal for Time Warner Cable earlier this year. It's also successfully sued to prevent AT&T's $39 bid for T-Mobile in 2011.

Electrolux already obtained regulatory approval in Brazil, Canada and Ecuador.