Information from Samsung, LG at issue in GE-Electrolux case - WDRB 41 Louisville News

Information from Samsung, LG at issue in GE-Electrolux case

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Electrolux CEO Keith McLoughlin at Greater Louisville Inc. annual dinner, Feb. 17, 2015 Electrolux CEO Keith McLoughlin at Greater Louisville Inc. annual dinner, Feb. 17, 2015
GE's Appliance Park in Louisville GE's Appliance Park in Louisville

LOUISVILLE, Ky. (WDRB) – Even facing a lawsuit from the U.S. Justice Department, Electrolux has insisted it can still complete its $3.3 billion acquisition of General Electric’s appliance division by the end of the year as originally planned.

But Electrolux and GE have put their own demand for expedited trial – currently scheduled for Nov. 9 in U.S. District Court in Washington, D.C. – at risk by requesting extensive business information from their South Korean competitors, Samsung and LG, according to a recent court filing by the Justice Department.

UPDATED, Aug. 20: In response, GE and Electrolux said they're prepared to try the case on Nov. 9 "with or without" the evidence sought from LG and Samsung's South Korean headquarters. The companies said the court should allow the requests and not adopt the government's "defeatist" attitude.

The case began July 1 when the Justice Department sued to block the Electrolux-GE Appliances merger on antitrust grounds. The combination would reduce competition in the market for cooking appliances sold to bulk buyers like home builders and apartment developers, the government contends.

The planned sale has big implications for Louisville, where about 3,800 hourly employees work at GE Appliance Park and about 2,200 salaried employees manage GE’s appliance division.

After GE and Electrolux “argued vigorously” to have the case decided “as quickly as possible,” the Justice Department and the judge agreed on July 31 to an “expedited schedule” with a Nov. 9 trial date, according to the Justice Department filing dated Monday.

But then, on Aug. 7, GE and Electrolux asked the court for permission to seek documents from Samsung and LG’s home offices in South Korea – a “complex and time consuming” request that “conflicts with the schedule they demanded,” according to the Justice Department filing.

Among the documents requested, for example, are LG’s “business plans” and “pricing and promotional strategies” for cooking appliances in the U.S. from January 2013 onward, according to the filing.

The Justice Department said GE and Electrolux’s attempts to get information from South Korea are “particularly unnecessary” given that the government already turned over a trove of documents it previously gathered from Samsung and LG, and GE and Electrolux have requested additional information from Samsung and LG’s United States affiliates.

The requests could even necessitate trips by lawyers on each side to South Korea to depose LG and Samsung officials – a complication that would surely delay the trial, the Justice Department argues.

But GE and Electrolux said it's necessary to seek documents from Samsung and LG's home offices. They included a letter from Samsung's United States affiliate, Samsung Electronics America, Inc., raising several objections to the companies' subpoena for information. 

Samsung and LG are important to the case because Electrolux argues that the Justice Department failed to consider the Korean companies’ significant role in the U.S. appliance market.

“They are two companies which over the last decade have increased their share of the U.S. appliance market from virtually nothing to about a 20 percent combined,” Joe Sims, an attorney representing Electrolux, said on a call with reporters July 1.

RELATED:

Electrolux promises $50 million more in savings from GE deal

SUNDAY EDITION | Electrolux has history of moving work to lower-wage factories

News analysis | For Louisville, lots of unanswered questions in GE, Electrolux deal

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