October 30, 2015 / 3:48 PM / 2 years ago

UPDATE 2-U.S. Justice Dept. rejects Electrolux proposal on GE appliance business

(Adds comments from judge, details on trial, U.S. government position)

WASHINGTON, Oct 30 (Reuters) - The U.S. Justice Department rejected an Electrolux offer to settle a fight over whether the Swedish company would be allowed to buy General Electric's appliance business, saying it was inadequate.

Justice Department lawyer Ethan Glass said on Friday "the proposal was well short of replacing competition" that would have been lost because of the deal.

Electrolux lawyer John Majoras said the Swedish company had believed that the offer to sell certain, undisclosed assets would resolve the issue. "There are no ongoing discussions," he added.

The two men spoke at a hearing preceding a mini-trial set to begin on Nov. 9 to determine if the $3.3 billion deal can go forward.

At the hearing, Judge Emmet Sullivan of the U.S. District Court for the District of Columbia urged the two sides to continue to work on a settlement. "Hope springs eternal," he said.

The United States asked a federal court in July to stop Electrolux, which makes Frigidaire, Kenmore and Tappan appliances, from buying GE's appliance business for $3.3 billion. The government believes the proposed deal violates U.S. antitrust law, which is designed to stop mergers that would raise prices for consumers.

The Justice Department has argued that Electrolux and GE, along with Whirlpool Corp, make 90 percent of the stoves and ovens sold to big builders and property managers in the United States.

Electrolux maintains that companies such as Samsung and LG Electronics are moving into the U.S. market for appliances, Ndiluting its market power.

The case is United States v AB Electrolux and General Electric Co, in the U.S. District Court for the District of Columbia, No. 15-1039. (Reporting by Diane Bartz; Editing by Doina Chiacu, Bill Trott and Andrew Hay)

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