A proposed merger between two of the largest packaged ice companies in the U.S. has been met with a list of divestiture requirements from the U.S. Justice Department’s Antitrust Division.
Reddy Ice, the biggest bagged ice manufacturer in the U.S., is looking to acquire Arctic Glacier, the country’s third largest packaged ice maker, for $126 million. The two companies combined sell ice across more than half of U.S. states and generate more than $800 million in combined annual revenue.
It’s a mammoth deal with the potential to create a bagged ice monopoly. So, the DOJ is stepping in with stipulations, largely focused on ice sold to retail chains in Oregon, Washington and parts of southern California, along with packaged ice sold to airlines and airline caterers in the Boston and New York City metropolitan areas.
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Per the terms of the deal, Reddy Ice will need to sell off its manufacturing and distribution facilities, and customer relationships and contracts, along with other assets, in southern California and in Washington; and divest its customer relationships and contracts, along with other assets, in Oregon, Boston and New York City.
The DOJ said the proposed settlement resolves antitrust concerns in parts of the country where the two companies currently compete, either directly via their facilities or via third-party co-packers that manufacture and deliver ice to their customers.
Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division framed the divestiture deal as a win for people who just want a cooler full of cold ones or a little ice in their in-flight drinks.
She said, “This transaction, as originally proposed, would have led to higher prices and lower service quality on packaged ice, a staple Americans enjoy everywhere from backyard cookouts to cross-country flights. Today’s settlement will maintain competition for the sale of packaged ice to the benefit of American consumers.”
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