Electrolux to pay $175 Million Break-Up Fee for Failed GE Deal


Electrolux to pay $175 Million Break-Up Fee for Failed GE Deal

Thursday, Dec 10, 2015

Electrolux AB’s failed ambition to acquire General Electric Co. ’s appliance business came at a price: The Swedish firm on Wednesday said it would pay the $175 million break-up fee demanded by the U.S. company.

The charge, compounded with the botched promise of creating a white-goods giant capable of rivaling with Chinese leaders and Whirlpool Corp. of the U.S., might also cost Keith McLoughlin his job as Electrolux chief executive, analysts said.

“Electrolux has put a lot of time, money and prestige into this deal,” said Mattias Eriksson, chief strategist at Nordea. “As the company goes back to the drawing board it might be a natural time to switch chief executive.”

Mr. McLoughlin didn’t respond to requests seeking comment. According to a company spokesman, he has said he was “fully committed to continue in (his) role.”

GE’s decision at the start of the week to abandon a $3.3 billion agreement to sell its appliance business to Electrolux has tossed the Swedish company 15 months backward, when it was trying to solve a delicate equation: How to counter the onslaught of Chinese and South Korean appliance manufacturers on its traditional Western markets while conquering positions in Asia.



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