- Planned takeover may limit competition: Australian watchdog
- Regulator to announce final decision on deal on Dec. 15
Recall Holdings Ltd. fell the most in six months after Australia’s anti-trust regulator said the company’s proposed sale to data-storage manager Iron Mountain Inc. raises competition concerns.
Consumers could be vulnerable to price increases or lower levels of service, while smaller rivals would be unable to keep the enlarged entity in check, the Australian Competition & Consumer Commission said in a statement Thursday. The companies’ combined market share in Australia would be as high as 71 percent, the commission said. It plans to announce its verdict on Dec. 15.
Iron Mountain’s sweetened stock-and-cash offer for Recall, announced on June 8, valued the deal at A$3.4 billion ($2.4 billion), including debt. According to the ACCC, Iron Mountain and Recall both compete for customers who need document storage facilities in several locations, a service few rivals can match.
“The ACCC is concerned that the transaction would remove the close competition between Recall and Iron Mountain,” ACCC Chairman Rod Sims said in the statement. “The merged firm would be comparatively unconstrained.”
Recall fell as much as 6.3 percent, and was 3.4 percent lower at A$7.32 at 10:55 a.m. in Sydney, valuing the company at A$2.3 billion. New York-traded Iron Mountain, which is down 19 percent this year, fell 2.1 percent Wednesday.
Recall was spun off from Brambles Ltd., the Sydney-based supplier of cargo pallets, in 2013. Iron Mountain is based in Boston. The proposed takeover is also being assessed by competition regulators in the U.S., the U.K. and Canada, the ACCC said in its statement.