Legally Compliant Handling of Legacy Systems in Mergers, Acquisitions, and Carve-Outs

By Emanuel Böminghaus, Legacy Systems Expert and Managing Director, AvenDATA

By Emanuel Böminghaus

Legacy Systems Expert and
Managing Director, AvenDATA

Mergers, acquisitions and carve-outs bring not only strategic and financial challenges but also major impacts on the IT landscape. Often, different system environments come together, including various ERP platforms, custom-built tools, outdated industry solutions and legacy databases.

This leads to a mix of legacy systems that must be retained for legal reasons but no longer fit into the new target structure. Without a structured approach, companies risk unnecessary costs along with legal and operational complications. In such cases, professional archiving is the key to a clean and audit-compliant transition, whether it involves a full acquisition or a targeted carve-out.

M&A Transactions and Carve-Outs Create IT Complexity

In real-world M&A scenarios or carve-outs, entire companies, business units or product lines are often sold, including their IT systems. This means legacy systems with decades-old structures must be retained, reviewed and assessed, regardless of whether they will be continued or replaced.

Carve-outs often create high-pressure situations. Buyers and sellers must quickly decide how to handle data and legacy applications, both technically and legally. Without a clear archiving strategy, companies risk data loss, access conflicts and unclear responsibilities.

Risks of Decommissioning Without Archiving

Shutting down a legacy system after a carve-out or acquisition without properly archiving the data can lead to violations of legal obligations. Key risks include:

Retention requirements under HGB, AO, GoBD or IFRS
Data protection regulations regarding availability, integrity and deletion of personal data
Proof obligations for auditors or regulatory authorities
Technical risks from unsupported or abandoned legacy systems

A common mistake is relying on database backups or manually saving system components without verifying whether the data remains accessible, interpretable, and audit-compliant in the future.

Archiving as a Solution for Legacy Systems After a Carve-Out

A professional archiving solution enables the complete and legally compliant shutdown of legacy systems while maintaining access to historical data. Relevant information is extracted, consolidated and transferred into an audit-compliant archiving environment.

This is especially important in carve-out scenarios, where system responsibility shifts to a new owner. Buyers gain access to the necessary data without having to operate outdated systems. Sellers can be confident that all obligations have been fulfilled once the legacy systems are handed over.

Legal Certainty for Buyers and Sellers

From a legal perspective, archiving legacy systems offers clear advantages in M&A transactions and carve-outs. Buyers receive structured, documented archives that help them meet regulatory and tax-related obligations. Sellers benefit from secure archiving that protects them from future claims, disputes or information requests.

An archived legacy system can also be explicitly included in the carve-out agreement, such as through the transfer of archived data without requiring access to the original system.

Conclusion: Archiving Should Be Part of Every IT Strategy in M&A and Carve-Outs

Any merger, acquisition, or carve-out that involves IT integration must also address archiving. Only through structured decommissioning of legacy systems can companies reduce risks, meet legal requirements and simplify IT landscapes in a sustainable way.

Archiving is not an additional task to be handled later. It is a core measure for legally compliant separation of old and new systems, benefiting buyers, sellers, and all stakeholders.

For those aiming to manage legacy systems efficiently and in compliance during mergers, acquisitions, or carve-outs, early professional support is essential. AvenDATA brings over 17 years of experience in archiving complex legacy systems across industries and geographies, with a strong focus on legal compliance, transparency and traceability. Our specialized solution helps companies decommission legacy applications in a structured way while ensuring full access to all relevant data.

Planning to archive a legacy system?