This paper presents a compaction scheme, based on the concept of compression ridges (CRs). The virtual grid based stick diagram of a layout is first converted automatically into a detailed layout which confirms to the design rules. All CRs are enumerated in both X and Y directions and their widths are calculated. The technique for choosing the CR to use for squeezing is based on the fact that a CR not only reduced area based on its width and length but may also preempt the reduction by some other CRs, both in the same and orthogonal directions. Choosing a CR with a certain width may reduce the maximum reduction possible (calculated based on a flow model) in the same direction and in the orthogonal direction (due to X-Y decision). Each CR is associated with a weight which signifies a measure of net reduction in area possible and the one with maximum weight is chosen to compact at each step.