Gone, Gone, the Damage Done*—Provisions in Transactional Agreements Can Raise Antitrust Risk

Soon after someone settles "gun jumping" charges, client alerts and blog posts with informative titles like "DOJ Settlement Resolves 'Gun Jumping' Charges" start flying around. These "alerts" and "posts" usually recite facts alleged in a DOJ complaint and then say certain conduct is fine (pre-closing integration planning under the watchful eye of an antitrust lawyer, of course), while other conduct (jointly setting prices before closing) is not. But few (if any) actually say what should be considered when negotiating the actual provisions of the transactional agreement to minimize risk of a "gun jumping" investigation.

First, what is gun jumping? Put simply, for transactions that require a merger filing, a seller cannot simply give the keys to the business to the buyer before the designated waiting period expires and the deal finally closes. The idea is to maintain the seller as an independent business in case the transaction is blocked by the antitrust enforcement