NEW YORK—The U.S. Department of Justice filed suit on Wednesday to block the sale of General Electric's appliance business to Sweden's Electrolux, saying the $3.3 billion deal would harm consumers.
The sale would limit competition and lead to higher prices of cooking appliances for US consumers, said the Justice Department, which filed the civil antitrust lawsuit in federal court in Washington.
The transaction "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," said Leslie Overton, a deputy assistant attorney general in Justice's antitrust division.
"This lawsuit also seeks to prevent a duopoly in the sale of these major cooking appliances to builders and other commercial purchasers, who often pass on price increases to home buyers or renters."
Electrolux is contesting the lawsuit, and issued a statement saying that it "believes the acquisition will increase competition and provide consumers access to a greater choice of high quality products at a wider range of competitive prices. The acquisition is intended to enhance Electrolux scale and efficiencies in order to invest more in innovation and growth for the benefit of all consumers, retailers, employees and shareholders.
"Electrolux also finds DOJ’s opposition to be wholly inconsistent with its 2006 decision to approve Whirlpool’s acquisition of Maytag – at the time one of Whirlpool’s major competitors on the U.S. home appliance market."
The GE-Electrolux deal, announced in September 2014, covers a broad range of appliances, including refrigerators, dishwashers, dryers, air conditioners and water heaters.
Cooking appliances comprised the largest share of revenues at 35%, according to an Electrolux press release announcing the deal.
GE said it intends to "vigorously" defend the sale to Electrolux and that it hopes to close the deal in 2015.
"GE continues to believe that GE Appliances's customers, consumers and employees will benefit from Electrolux's commitment to the appliance business and its ability to compete with global competitors," the company said.
Dow member GE was flat at $26.58 in afternoon trading.
Copyright Agence France-Presse, 2015