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    Iron Mountain Required to Divest Acquisition Assets in 15 U.S. Cities

    Apr 13, 2016

    The U.S. Justice Department announced on March 31 that it had reached a consent decree that will require Iron Mountain Inc. to divest records management assets in 15 U.S. metropolitan areas in order to proceed with its $2.6 billion acquisition of Recall Holdings Ltd. Similar agreements were announced on the same day by Australia’s Competition and Consumer Commission (ACCC), the U.K.’s Competition and Markets Authority, and Canada’s Competition Bureau.

    “Iron Mountain’s proposed acquisition of Recall would have harmed records management customers in 15 metropolitan areas by dramatically reducing competition in these markets,” said Bill Baer, assistant attorney general for antitrust, in an online statement. “As a result of today’s settlement, these customers will continue to enjoy the fruits of competition – lower prices and higher quality services.”

    According to the complaint filed by the Justice Department in a U.S. District Court, Iron Mountain and Recall are the two largest providers of hard-copy records management services (RMS) in the United States and compete directly in this space in several geographic areas. Any new RMS entrant, the complaint states, would be required to expend significant time and capital to successfully enter any of the relevant geographic markets. As a result, the agreement requires the company to divest records management assets in Detroit, Kansas City, Charlotte, Durham, Raleigh, Buffalo, Tulsa, Pittsburgh, Greenville/Spartanburg, Nashville, San Antonio, Richmond, San Diego, Atlanta, and Seattle.

    Under the Antitrust Procedures and Penalties Act (APPA), the consent decree is not final until it is subject to a 60-day public comment period and the District Court determines that the agreement is in the public interest. 

    According to an Iron Mountain press release, approval of the acquisition in Canada is subject to a requirement that the company sell a number of records management facilities and customer contracts in six major Canadian cities. The agreement in Australia is contingent on Iron Mountain divesting its business in that country, with the exception of its data management business throughout the country, and its records and information management and data management businesses in the Northern Territory of Australia. In the U.K., conditional consent was granted for the merger to be implemented prior to regulatory clearance and subject to additional potential divestitures. 

    “Upon closing of the proposed acquisition and after giving effect to required divestitures, Iron Mountain expects to continue to provide information management services, data management services and information destruction services to the respective customers of Iron Mountain and Recall in each market and country where they collectively provide service today,” the company declared in its press release.

    The Washington Policy Brief is an online advisory that contains brief summaries of recent legislative and regulatory issues that may affect the records and information management profession. Further information about the issue is accessed by clicking on the link provided at the end of each summary.

     

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