Merger pre-completion - ACCC takes action on gun jumping

Introduction

Yesterday in the Federal Court of Australia, the Australian Competition and Consumer Commission(ACCC) instituted against Cryosite Limited (Cryosite), its first 'gun jumping' proceeding for alleged cartel conduct. The allegations concern the terms upon which Cryosite agreed to sell its assets to Cell Care Australia Pty Ltd (Cell Care).

Gun jumping explained

The term 'gun jumping' uses the metaphor of a race, in which the merger parties, who are also competitors, move to consummate a merger before completion. From a competition law perspective, before a merger of competitive businesses becomes effective (i.e. completes), the parties are still competitors and must continue to operate as such until completion.