Welbilt will divest its Manitowoc Ice brand to alleviate concerns that the Ali Group could wield too much power in the ice machine sector when their upcoming merger goes through.
The two companies are currently looking for a buyer for the brand, which supplies a range of modular and undercounter ice machines, after concerns were raised by the US Department of Justice.
The pair said they were “confident” that offloading the brand would ensure regulatory approval.
The companies expect to complete the sale of Manitowoc Ice in early 2022 and then close the acquisition of Welbilt by Ali Group shortly thereafter.
Ali Group already owns two of the industry’s largest ice maker manufacturers in the shape of Scotsman and Ice-O-Matic.
Ironically, both of those brands were sold by Welbilt (then known as Manitowoc) to gain government approval for the takeover of Enodis back in 2008.
The decision to offload Manitowoc Ice comes after Welbilt and Ali Group submitted regulatory filings for their merger in all required jurisdictions, including the US, UK and European Union.
They decided to act after receiving a second request for information from the US Department of Justice focusing on the companies’ ice brands.
Last week, Welbilt confirmed that stockholders had approved the takeover by Ali Group, with 99.72% of shares cast in favour of the deal.
Ali Group’s offer is worth approximately $3.5 billion (£2.5 billion) in aggregate equity value and $4.8 billion (£3.5 billion) in enterprise value.