Appliances for Sale!

Abstract

The General Electric Company's (GE's) iconic Appliances division enjoyed a significant role in the company throughout the 20th century, representing one of the most recognized engines of the GE brand. By the 21st century, however, GE had changed its focus to technology and infrastructure businesses, and GE Appliances' contribution represented less than 5% of GE's revenue and profit. Recognizing GE Appliances' lack of fit with the strategic direction of the company, GE embarked upon a sale process in 2008, but when the financial crisis struck, it pivoted to a spin-off, went back to a sale process, and then canceled the process altogether and decided to invest more than $1 billion in GE Appliances including new products, renovated factories, and reshored manufacturing. It wasn't long before corporate thinking and an active board of directors pushed to restart the sale process of a more attractive GE Appliances asset. On September 8, 2014, GE announced it had signed an agreement to sell GE Appliances to global consumer-goods company Electrolux for $3.3 billion. This case examines GE Appliances' journey through a 7-month single-party sale negotiation, followed by a 15-month integration planning, government approval, and a court case. Two teaching notes included with this case offer legal and business strategy analysis of the proceedings, making the case ideal for use in undergraduate- or graduate-level business law courses, business strategy courses, and courses focused on antitrust law and mergers and acquisitions. Excerpt UVA-S-0344 Apr. 1, 2021 Appliances for Sale! On Friday, December 4, 2015, Jeff Immelt, chairman and CEO of the General Electric Company (GE), asked each person assembled for their view on the matter at hand. The main question on the table: How much confidence did the leadership have that Electrolux's $ 3.3 billion acquisition of GE Appliances would be approved by the Washington, DC, District Court? Gathered around the table were Immelt's incoming general counsel, Alex Dmitrief, his retiring general counsel, Brackett Dennison, as well as his CFO, Jeff Bornstein. Chip Blankenship, CEO of GE Appliances, his CFO, Mark Krakowiak, and his general counsel, Dan Rowley, were also present. No one had much confidence in the Electrolux/GE Appliances position based on reading the judge's responses and interactions with the prosecution, even though everyone remained convinced about the merits of the case. At this stage, all the evidence had been presented, the depositions and testimonies were in the rearview mirror, and it would be 30 to 60 days before Judge Emmet Sullivan rendered his opinion. As the dialogue progressed, the leaders became more confident that GE would lose the case. The decision at hand for GE leadership? Press forward all the way for the judge's written decision or allow the definitive agreement to expire on Monday, December 7 . . .