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Summary: Electrolux is aiming to buy General Electric for $3.3 billion, but the U.S. Justice Department is attempting to block the deal.
AB Electrolux is trying to buy General Electric Co., but has been hitting roadblocks from opposing companies. Home Depot Inc. executive Bob Baird has stepped up to their aid in U.S. federal court to argue their alliance will be good for consumers as the appliance business faces stiff competition from Asian competitors.
See The Home Depot Inc. Hit with Class Action Lawsuit for more recent news about The Home Depot.
The Justice Department disagrees, arguing that the maker of brands such as Frigidaire, Tappan, and Kenmore combining with GE will raise prices five percent. The Department also questioned Baird’s motives behind supporting the $3.3 billion deal, alluding to a potential job offer with Electrolux. He has worked for The Home Depot for 15 years.
See General Electric to Sell Most of Its Fleet-Financing Business for more recent news about General Electric.
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The Department is asking for an injunction from Judge Emmet Sullivan to stop the deal. Ethan Glass, who is arguing on behalf of the government, pointed out emails of Baird’s that contradicted his statements. In one email an Electrolux executive contested a higher price of $998 on a refrigerator with Baird’s response, “I think $898 is too cheap. But thanks for asking.â€
Another email between Baird and a GE executive discussed the stock of the company, stating “tomorrow should be a good day for our stock.†That next day Home Depot had higher than expected earnings, sending their share prices upward. Baird tried to explain this comment as it being after the market had closed, but Glass countered, “There is after-hours trading.â€
Electrolux is trying to argue that the deal would give the company a better standing during negotiations with suppliers like steelmakers and not increased power over pricing, despite the fact that they are the primary producers of lower-end kitchen appliances.
Photo: wsj.com
