CMA Accepts Ali Group, Welbilt’s Plan To Divest Ice Company

The agency says the sale of Welbilt's Manitowoc Ice business is “clear-cut and appropriate to remedy, mitigate or prevent the competition concerns.”

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Ali Group and Welbilt's proposed solution of divesting Manitowoc Ice has melted away competition concerns.

After months of investigating Ali Group and Welbilt’s anticipated merger due to competition concerns, the U.K.’s Competition and Markets Authority (CMA) has accepted the manufacturers’ solution of divesting Welbilt’s Manitowoc Ice.

The CMA says the sale of the ice business to Pentair is “clear-cut and appropriate to remedy, mitigate or prevent the competition concerns.” This is because, the CMA continues, the divestment business will be able to compete in the supply of ice machines and, therefore, restore competition that would have been lost as a result of the merger.

The investigation will not be referred to a Phase 2.

The CMA began its investigation earlier this year to determine whether the merger of the two commercial foodservice equipment manufacturers would result in a substantial lessening of competition in the U.K.

Last month, the agency said the merger gives “cause for concern,” namely around ice machines. The manufacturers previously proposed the solution of divesting Manitowoc Ice and asked the CMA to use the “fast-track” procedure to allow it to be considered as soon as possible.

In its final decision on July 11, the CMA says evidence indicates Pentair has sufficient resources and expertise to manage the divestment business to operate as a competitor immediately after Ali Group and Welbilt’s merger.

Pentair agreed to purchase Manitowoc Ice earlier this year for approximately $1.6 billion.

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