Proposed Settlement Would Force Ice Giants to Divest Across 5 States in $126M Packaged Ice Merger

The Justice Department’s Antitrust Division announced that it will require Stone Canyon Industries Holdings LP, the owner of Reddy Ice, and Chill Parent Holdco LP, the owner of Arctic Glacier, to divest assets in California, Massachusetts, New York, Oregon, and Washington.

The DOJ says this action would resolve antitrust concerns arising from Reddy Ice’s proposed $126 million acquisition of Arctic Glacier.

The proposed divestitures preserve competition for packaged ice sold to retail chains, airlines, and airline caterers in these states.

The Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the Division filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.

“The Antitrust Division is committed to enforcing the antitrust laws in markets that impact American consumers and businesses,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “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.”

Reddy Ice and Arctic Glacier are the largest suppliers of packaged ice sold to retail chains in Oregon, Washington, and Imperial and Riverside counties in southern California.

They are also the largest suppliers of packaged ice sold to airlines and airline caterers in the Boston and New York City metropolitan areas.

Proposed Final Judgment Reddy Ice 0 by scott.mcclallen

The proposed settlement resolves anticompetitive concerns in these geographies where the parties currently compete, either directly via their facilities or via co-packers that manufacture and deliver ice to the parties’ customers on their behalf.

Under the terms of the proposed settlement, the parties must divest (1) Reddy Ice’s manufacturing and distribution facilities and customer relationships and contracts, along with other assets, in Imperial and Riverside counties in southern California and in Washington; and (2) divest customer relationships and contracts, along with other assets, in Oregon and in the Boston and New York City metropolitan areas. The parties must also provide advance notice of certain future transactions and allow a monitor to supervise their divestiture of the assets and their compliance with the consent decree.

Reddy Ice is the largest producer of packaged ice in the United States, with annual revenues of approximately $511 million. The company sells packaged ice in 37 states and the District of Columbia.

Arctic Glacier is the third largest producer of packaged ice in the United State,s with annual revenues of approximately $306 million. It sells packaged ice in 19 states.

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person should submit written comments concerning the proposed settlement within 60 days following the publication to Jill Maguire, Acting Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530. At the conclusion of the public comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.