Electrolux AB down after US Justice Department's refusal

Right after the Justice Department rejected its proposal to resolve an antitrust lawsuit, Electrolux AB fell in the US trading.

According to Reuters, the US Justice Department rejected a proposal to resolve Electrolux's antitrust lawsuit that would block the $3.3 billion acquisition of General Electric's household-appliance business.

According to Justice Department lawyer Ethan Glass, Electrolux's proposal was inadequate and "was well short of replacing competition" that would have been lost due to the deal. He said the settlement discussion is done.

Bloomberg Business reported that the Swedish appliance manufacturer's American depository receipts went down 6 percent to $55.90. This is the biggest plunge it has had since the company was sued in July 1 by the US to block the takeover. The deal was blocked for fear that the tie-up would lead to price hikes. The lawsuit against Electrolux and Fairfield, GE to prevent the deal will go to trial on November 9. It will be under US District Judge Emmet Sullivan, who encouraged the companies to continue negotiating.

In a report by The Courier-Journal, Electrolux spokeswoman Eloise Hale said, "We presented the DOJ with what we believed was a reasonable divestiture settlement package that addressed the government's concerns."

"We strongly disagree with their assessment of the acquisition and are confident in the merits of our case," she said.

If Electrolux wins the lawsuit, the deal would be adding brands in GE's lineup. One of these additions would be Hotpoint, but GE already has AEG stoves and Frigidaire. Electrolux aimed for the deal to improve its sales in North America and be strong enough to take on Whirlpool Corp., which currently leads the market in that region.

Meanwhile, for GE, the deal would mean shifting its focus on manufacturing heavy-duty machinery, such as jet engines and oilfield equipment. GE CEO Jeffrey Immelt is cutting consumer-focused division. He is also slashing $200 billion worth of financial businesses as he focuses the operation on industrial units.