Electrolux Boss Vows to Complete GE Appliance Deal

By Dominic Chopping 

STOCKHOLM-- Electrolux AB boss Keith McLoughlin has vowed to press ahead with the $3.3 billion purchase of General Electric Co.'s appliance business despite Wednesday's move by the U.S. Department of Justice to try to block the deal.

Electrolux shares plunged 10% on the Stockholm bourse as investors digested the unexpected obstacle the Swedish company faces in trying to bulk up in North America to compete better with Whirlpool Corp., its main rival.

"We intend to get the deal done this year," the Swedish company's chief executive said on Thursday.

The U.S. Justice Department said late on Wednesday it would take the case to court on the grounds that it would harm competition in the white-goods sector, particularly in the market for cooking appliances--like ranges and wall-mounted ovens--sold to "contract channel" customers such as home-building companies, property managers and hotels.

The Justice Department lawsuit argues that only appliance makers with an array of products can meaningfully compete for those customers. The Electrolux purchase would leave only one other major competitor in the market, namely Whirlpool, with the three companies currently accounting for more than 90% of sales of major cooking appliances to contract purchasers, the suit alleges.

Mr. McLoughlin said Electrolux is confident of presenting its case in front of a neutral judge and getting the go-ahead to complete the deal.

The U.S. industry is competitive and will become more so, meaning consolidation is needed to increase scale and fund innovation, which would give consumers more, not less, choice, he said.

Electrolux will start talks with the Justice Department to see if a solution can be found before the case reaches court, he added. Company attorneys have said the Justice Department process can take up to six months.

Separately, Mr. McLoughlin said he has no plans to step down, saying the media had got mixed up in reporting last week that he was thinking of quitting. Electrolux is searching for candidates to take the helm of its North American unit, not the whole group. "I'm committed to the company and will remain that way," he said.

Write to Dominic Chopping at [e-mail]

Access Investor Kit for Electrolux AB

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=SE0000103814

Access Investor Kit for Electrolux AB

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0101982082

Access Investor Kit for General Electric Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US3696041033

Subscribe to WSJ: http://online.wsj.com?mod=djnwires