Electrolux’s (ELUXb.ST) $3.3 billion deal to buy General Electric’s (GE) appliance business fell through on Monday, torpedoing the Swedish firm’s plan to bolster its U.S. business and sending its shares down as much as 15 percent.
Electrolux said it would focus instead on developing existing brands such as Frigidaire, Kenmore and Tappan and could look at other acquisitions.
But analysts said neither would offer such a quick way to close the gap on bigger rival Whirlpool (WHR.N), with some suggesting CEO Keith McLaughlin might now decide to leave.
“I’m not sure how much he will enjoy staying on now that what might have been his last deal won’t go through,” Handelsbanken Capital Markets’ Karri Rinta said.
“One would definitely have preferred for this deal to go through. Now it is somewhat back to square one.”
With his family having returned to the United States several years ago, speculation has been rife McLoughlin, who has been CEO for almost five years and imported manufacturing practices from the auto industry to boost profitability, could soon leave.
However, McLoughlin said in a statement he remained committed to Electrolux and would continue as chief executive.
Announcing the deal with GE (GE.N) last year, the Swedish firm said its biggest ever acquisition would double its sales in the United States and step up the challenge to Whirlpool in the world’s largest appliance market.
But the U.S. Department of Justice (DOJ) said the acquisition would reduce competition and drive up prices, and asked a federal court in July to stop it…