Justice Department Requires Reddy Ice to Divest Assets to Proceed with Proposed Acquisition of Arctic Glacier

The Justice Department's Antitrust Division announced today that it will require Stone Canyon Industries Holdings LP (owner of Reddy Ice) and Chill Parent Holdco LP (owner of Arctic Glacier) to divest assets in California, Massachusetts, New York, Oregon, and Washington to resolve antitrust concerns arising from Reddy Ice's proposed more-than $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."

As detailed in the complaint, 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.

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 notification for certain future transactions and allow a monitor to supervise the parties' divestiture of the assets and 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 States 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.

Note: View the Proposed Final Judgement here and the Complaint here.