Antitrust suit filed against Electrolux amid signs of renewed scrutiny

By Cate Chapman on July 2, 2015

electroThe activity last week came as a string of successively bigger mergers and acquisitions were announced–including ACE’s $28.3 billion purchase of Chubb and Aetna’s $37 billion bid for Humana–and may signal renewed vigilance on the part of the government in antitrust matters.

A letter from the DOJ received June 30 by major US carriers demanded copies of all communications the airlines had with each other, analysts and major shareholders about plans for passenger-carrying capacity, The Associated Press said, citing a document it obtained. Limiting seat availability keeps airfares high.

On July 1, the DOJ said the $3.3 billion acquisition by Electrolux, whose brands include Frigidaire, would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the US, thereby eliminating competition that has benefited American consumers. Purchasers in the US spent over $4 billion on major cooking appliances in 2014, it said.

“Electrolux’s proposed acquisition of General Electric’s appliance business 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 Deputy Assistant Attorney General Leslie C. Overton of the Justice Dept.’s Antitrust Division.

The civil antitrust lawsuit it filed “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,” she said.

Charlotte, N.C.-based Electrolux North America is a unit of AB Electrolux and makes and sells major appliances, including those under the brand names Frigidaire, Tappan and Electrolux. Electrolux’s annual major-appliance sales in the US total approximately $2.6 billion, the department said.

Fairfield, Conn.,-based General Electric’s appliance business makes and sells major appliances, including those under the brand names GE Monogram, GE Café, GE Profile, GE, GE Artistry and Hotpoint. In the US, its annual major-appliance sales total approximately $3.4 billion.