Iron Mountain  (IRM - Get Report) said Thursday the U.K.'s Competition and Markets Authority has referred the company's planned acquisition of rival storage and information management services company Recall Holdings (RCLHF) for an in-depth phase 2 review.

Iron Mountain said it "intends to cooperate fully with the CMA and looks forward to the opportunity to demonstrate that its proposed acquisition of Recall does not raise appreciable competition concerns in the United Kingdom."

The deal already faced extended reviews in the U.S. and Australia.

Initially, Iron Mountain predicted the merger would pass regulatory approvals in time to close in the first quarter of 2016. However, on Thursday Iron Mountain said only that it believes the transaction "will be cleared in due course." The U.K. has until June 29 to deliver its verdict. 

On Dec. 30 the CMA gave Iron Mountain five working days to spell out how it planned to address the authority's detailed competition concerns. Iron Mountain proffered a plan for assuaging those concerns but the CMA said Thursday that after reviewing Iron Mountain's offered undertakings the authority "was not confident that these would resolve all the potential concerns in a clear-cut manner."

In December the CMA found the companies are critical providers of records management services, which is the storage and retrieval of paper and hard copy records, and of physical off-site data protection, which involves the storage and retrieval of data and media on tapes and discs. The two companies operate a total of 59 sites across the U.K.

In the U.K. the companies serve both national and local/regional customers. They also serve oil and gas customers in the Scottish cities of Aberdeen and Dundee with more special requirements.

The companies are close competitors and "account for a very significant proportion of the supply of these services nationally," the CMA said. Any proposed remedy to address competition concerns raised by the merger must consider factors important to customers such as retrieval times, quality and security of facilities and the geographic scale of networks and capacity, the CMA said.

The CMA warned "that there might be insufficient rivalry from other suppliers or new entrants to offset this loss of competition" presented by the merger.

"Our research and customer responses indicate that these are close competitors in providing two distinct types of records and information management services," said Andrea Coscelli, executive director, of the CMA's Markets and Mergers unit. "Iron Mountain is the market leader in both of these markets in the UK. With limited existing competition and no potential new entrants identified, the concern is that the merged company could raise prices or otherwise downgrade those elements of their services which matter to customers."

In November the Australian Competition and Consumer Commission issued a so-called statement of issues voicing concerns about the transaction, and in August the U.S. Department of Justice extended its review of the transaction.

Recall is listed in Sydney but based in Atlanta and divestitures in the U.S. are widely expected if the two groups are permitted to combine.

The A$3.4 billion ($2.6 billion) transaction was announced in June. Recall insisted on a fair number of antitrust protections before agreeing to the deal. With respect to the Records and Information Management business in the U.S. and Canada, Iron Mountain committed to divest up to $30 million in aggregate revenue to obtain clearance from competition regulators in those two countries.

Regarding the Records and Information Management business in Australia, Iron Mountain agreed to make whatever level of divestitures are necessary to win approval from competition regulators there. With respect to all other business lines -- including Data Protection worldwide and the Records and Information Management business in all jurisdictions other than the U.S., Canada and Australia -- Iron Mountain must make whatever divestitures are necessary to obtain competition regulators' approval. Iron Mountain also is obligated to litigate any regulatory attempt to restrain the deal.