How to combine RIM programs after a merger.

• Author: Richardson, Blake
• Position: Records and information management

From the moment two companies publicly announce a merger, their operational wheels begin turning. This article identifies issues that may not be discussed before the merger is completed and provides advice about the issues that must be discussed post-merger.

Mergers and acquisitions (M&A) are a potential reality for organizations regardless of their industry, revenue, geography, or size. They occur for a variety of reasons, such as gaining economies of scale, increasing operational synergies, reducing tax liabilities, and pre-empting competition.

Whatever the reason may be, one constant exists: an M&A will have an impact on the combined organization. This article addresses the impacts to records and information management (RIM) in a newly merged environment.

Merging Parties' Discussions

Pre-Merger

From the moment two companies publicly announce a merger, their operational wheels begin turning, though there are regulatory limitations on what the two organizations can discuss, share, and plan until the merger has been approved. The limitations exist to prevent "gun-jumping," which according to attorney Richard Liebsekind, is the term the Antitrust Division of the U.S. Department of Justice (DoJ) and the Federal Trade Commission (FTC) use to refer to a "variety of actions that merging parties might enter into prior to closing to facilitate the merger and expedite the integration of the companies."

In the presentation "Gun-jumping: Antitrust Issues Before Closing the Merger," Liebsekind made to the ABA Section of Business Law, Antitrust Committee ABA Annual Meeting in San Francisco clear examples of gun-jumping provided by the DoJ and the FTC are coordinating prices and terms to be offered to customers or allocating customers for sales to be made prior to the merger and coordinating negotiations with customers for sales to be made after the merger.

"The government's position," Liebsekind said, "is that firms must remain competitors until closing, and cannot lessen competition between them in order to facilitate a merger that has not been consummated."

Therefore, merging companies conducting pre-closing due diligence and planning activities need to know that antitrust agencies might view their activities as violations of federal law.

In most cases there are operational matters that can be discussed between the organizations during this phase of the merger process. RIM professionals should consult with their legal or compliance department to determine what can and cannot be discussed with their counterparts in the other organization.

RIM matters that may be allowed for discussion in the pre-merger phase include:

* Record retention schedule formats

* Offsite storage vendors used (but not contractual terms or pricing)

* Number of employees (but not pay rates)

* Technology and how it is used (but not related pricing or maintenance costs)

* Reporting structure

* Approach to disposition

* Geographical operating locations and related challenges Conducting pre-merger discussions with the other organization's RIM manager allows for early insight into the operational differences between the RIM programs and facilitates additional Q&A and...