Scottish sales required after records management merger
Iron Mountain will have to sell Recall’s sites in the Aberdeen and Dundee areas, following its acquisition of the records management provider.
In its final report published today, the Competition and Markets Authority (CMA) has found that while the merged company will face sufficient competition in most of the UK, there will be fewer alternatives for customers of records and information management services (RIMS) in the Aberdeen and Dundee areas. The provisional findings, which were published in May, had already identified competition concerns in these areas.
The inquiry group of independent panel members investigating the merger has therefore concluded that, in order to preserve competition, Iron Mountain should sell Recall’s existing operations in Aberdeen and Dundee, known as C21 Data Services. The buyer will need to be approved by the CMA and will have to demonstrate that it has the capability to compete with Iron Mountain. Recall acquired C21 Data Services last year.
Both companies provide RIMS in the UK – specifically records management services (RMS), which comprise the storage and retrieval of paper and hard copy records, and physical offsite data protection (OSDP) services, which involve the storage and retrieval of data and media on tapes/discs. The 2 companies operate from a total of 58 sites across the UK.
The parties both provide RMS and physical OSDP to national and local customers, and oil and gas customers with more specialist requirements, such as for storage of geological ‘core’ samples. The need to be able to access such stored information quickly means that customers require such facilities to be located nearby – generally within a 50-mile radius.
The inquiry group found that in most areas of the UK where both companies are active, there are sufficient alternative suppliers to preserve competition and ensure that the merged company will be prevented from raising prices or otherwise reducing the level of service to customers.
However in the Aberdeen and Dundee areas, the merged company would face fewer competitors with little prospect of new entry and expansion to counteract this. As such, the group identified a substantial lessening of competition in the supply of RMS and OSDP services in the Aberdeen and Dundee areas – as well as in the supply of specialist RIMS services to oil and gas customers in the Aberdeen area.
Anne Lambert, Inquiry Chair, said:
We consider that the sale of Recall’s operations in the Aberdeen and Dundee areas will provide a clear-cut way to address our concerns and ensure customers there still benefit from competition and choice.
Full information on the merger investigation can be found on the case page.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn. Sign up to our email alerts to receive updates on merger cases.
- The CMA referred the case for a phase 2 investigation in January 2016, when it was still anticipated. Although the merger was completed in May 2016, ‘hold separate’ undertakings prevent Iron Mountain from integrating Recall’s UK business until completion of the CMA’s investigation.
- All the CMA’s functions in phase 2 merger inquiries are performed by inquiry groups chosen from the CMA’s panel members. The appointed inquiry group are the decision-makers on phase 2 inquiries.
- The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business; the membership of an inquiry group usually reflects a mix of expertise and experience.
- The members of the inquiry group are: Anne Lambert (Chair), Robin Aaronson, Lesley Ainsworth and Graham Sharp.
- Enquiries should be directed to Rory Taylor (rory.taylor@cma.gsi.gov.uk, 020 3738 6798).