GE Scraps $3.3 Billion Appliance Unit Sale to Electrolux

GE Appliances Sold To Electrolux Of Sweden For 3.3 BillionGE has scrapped a $3.3 billion plan to sell its home appliance business to the Swedish company Electrolux, a deal opposed by U.S. regulators over concerns about competition.

The Fairfield, Connecticut, conglomerate said that it will continue to run the business as it looks for other options to sell it.

General Electric Co. offered no reason for its decision in a brief statement released Monday.

Electrolux is the world’s second-biggest home appliance maker after U.S. rival Whirlpool (WHR). The Stockholm-based company sells most of its products in the U.S. under the Frigidaire brand.

The U.S. Department of Justice had sued to stop the deal in July, saying the combined company would dominate sales of ovens and other cooking-related kitchen appliances, especially to customers such as homebuilders, property managers, hotels and governments.

An antitrust attorney representing Electrolux downplayed competitive concerns by noting that Asian brands like Samsung and LG have rapidly increased their share of the large appliance market over the past decade. The attorney also said huge retailers such as Home Depot (HD) and major homebuilders can pressure manufacturers to keep prices low and competition intense.

Electrolux said Monday that it “regrets that GE has terminated the agreement while the court procedure is still pending.”

The Swedish company said settlement proposals that it considered to be reasonable were offered to federal regulators and would have addressed concerns about competition, but the Department of Justice rejected those proposals.

General Electric has been selling parts of its portfolio as it pushes to focus more on core industrial businesses that make large, complicated equipment for other companies.

It said Monday that it was entitled to a breakup fee of $175 million from Electrolux.

GE (GE) shares fell 9 cents to $30.40 in premarket trading Monday about an hour ahead of the U.S. market open, while Electrolux shares dropped 11 percent in afternoon trading in Stockholm.

Keurig Green Mountain to Be Taken Private for $13.9 Billion

Non-Recyclable Keurig Coffee Pods Come Under Fire--And Continue To SellKeurig Green Mountain, the maker of K-Cup single-serve coffee pods, said Monday it would be bought by an investor group led by Germany’s JAB Holding Co. for about $13.9 billion, creating a global coffee giant.

The deal, pitched at a 78 percent premium to Keurig’s Friday close, is the latest by JAB as it seeks to become a formidable competitor to world coffee market leader Nestle.

JAB formed a joint venture in July called Jacobs Douwe Egberts — now the largest coffee company — by combining its D.E. Master Blenders 1753 business with the coffee business of Mondelez International (MDLZ).

JAB, the investment vehicle of the billionaire Reimann family of Germany, bought U.S. coffee companies Caribou Coffee Co. and Peet’s Coffee & Tea in 2012.

Keurig’s (GMCR) shares were trading at $90.05 in early trading Monday, short of the $92 a share offer.

The stock last traded at $92 in May. Nearly 13 percent of the company’s total float is held by short sellers.

“The 78 percent premium should keep other bidders at bay,” SunTrust (STI) Robinson Humphrey analyst William Chappell wrote in a client note.

Keurig, which had lost more than 60 percent of its market value this year up to Friday’s close, has struggled with declining sales of its single-serve coffee pods and brewers due to intense competition.

The company’s latest countertop device, a cold drink brewer called Keurig Koldlaunched in September, failed to excite buyers.

Coca-Cola Co. (KO), Keurig’s biggest single shareholder, said it would receive cash for its 17.4 percent stake in the Vermont-based company. The stake is valued at about $2.4 billion at the offer price. Coke’s shares were little changed.

JAB is acquiring Keurig in partnership with investors who are already shareholders in Jacobs Douwe Egberts, including Mondelez and entities affiliated with BDT Capital Partners.

JAB’s other holdings include controlling stakes in cosmetics company Coty (COTY) and luxury goods-makers Jimmy Choo (CHOO).

The deal is expected to close in the first quarter of 2016.

Bank of America Merrill Lynch (BAC) and Credit Suisse (CS) provided fairness opinions to Keurig Green Mountain.