Announcing the deal in autumn last year, Electrolux said its biggest ever acquisition would double its sales in the United States and step up the challenge to arch rival Whirlpool in the world's largest appliance market.
But the U.S. Department of Justice (DOJ) said the deal would reduce competition and drive up prices, and asked a federal court in July to stop it from going ahead.
Electrolux, which makes Frigidaire, Kenmore and Tappan appliances, and the DOJ were arguing in court when GE pulled the plug, leaving the Swedish firm's U.S. strategy in tatters.
"It is a major disappointment for Electrolux," said Handelsbanken Capital Markets analyst Karri Rinta.
Shares in Electrolux were down 11.9 percent at 210.5 crowns, the biggest fall by a European blue-chip stock.
"We're disappointed but we're certainly not defeated," Electrolux CEO Keith McLoughlin told a conference call. "It is a very large, global market that is growing, and we believe that Electrolux is well positioned to participate in that growth."
McLoughlin said the company would "continue to have a strong, robust M&A (mergers and acquisitions) process," without elaborating.
In 2014, Electrolux made around 33 percent of its 112 billion Swedish crowns ($13.2 billion) of sales in North America against around 35 percent in Europe.
The acquisition of GE's appliance business would have seen Electrolux leapfrog Whirlpool as the world's biggest appliances maker, strengthening its position in North and South America.
David Hallden at UBS, one of few analysts with a negative view on the GE deal due to the price, said Electrolux should look to grow its existing businesses in a robust U.S. market and a gradually recovering European one.
"I think Electrolux should resist any temptation on acquisitions," said Hallden, who has a sell recommendation on Electrolux stock and a target price of 205 crowns.
The Swedish company said GE had requested it to pay out a termination fee of $175 million that was part of the transaction agreement.
It said fourth-quarter results would include about 175 million crowns of transaction and integration costs and would be hit by about 225 million crowns of costs arising from a bridge facility intended to finance the deal.