American courts might intervene in the deal that would see Swedish Electrolux acquire American General Electric's household appliance division. They fear the market may be disturbed.
Higher prices for consumers
Last year, Electrolux and General Electric came to a 3.3 billion dollar (3 billion euro) agreement for the latter's household appliance division. This would help the Swedes to increase its American foothold and lower its dependency on the European market. In total, Electrolux would get a 40 % market share in the US if the deal is finalized.
The US Department of Justice now has plans to block the deal as it fears the American consumer will end up paying more for household appliances. On top of that, because of the market share Electrolux and its competitor Whirlpool would have, it also fears a duopoly.
The Swedish company has already refuted these claims and feels the Department of Justice's stance is not consistent with previous decisions. For example, it did not object to Whirlpool's purchase of Maytag, even though that was also one of Whirlpool's largest competitors. General Electric also feels the deal should just be finalized.