Gun-jumping in an acquisition: separate signing and closing, control information exchange and manage interim covenants.
BRANDAUER Rechtsanwälte
Salzburg law firm for corporate, company and transaction law
Every transaction is handled by a coordinated team of lawyers, legal staff and specialists. In company acquisition matters we look at structure, contract, tax and liability together.
An acquisition can create merger-control risk before closing. The main concern is that buyer and target begin acting as one business while clearance is still pending.
Gun-jumping covers premature implementation or influence before the required clearance. The exchange of information also needs a clear purpose and access control.
This article distinguishes the issue from the broader approval review and from contractual closing conditions.
Until closing, the target generally remains independent. Review the purpose, scope, recipients and safeguards for each exchange.
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Until closing, the target generally remains independent. Review the purpose, scope, recipients and safeguards for each exchange.
Define which information is necessary for the review. Current prices, customer-level data, bids and strategic plans should not circulate without safeguards. Use a clean team, maintain an access record and delete information when the transaction purpose ends.
Record the transaction purpose and avoid operational instructions, joint pricing or buyer control of daily management before closing. Reassess the categories if the transaction scope changes.
Merger control must be effective before the transaction is implemented. Signing and closing are therefore separate. Filing does not itself equal clearance.
Before closing, the target generally remains independent. Side letters and practical instructions must not transfer control early.
Due diligence needs information, but current prices, individual bids and customer-level data create different risks from historical or aggregated material. The assessment depends on the market and the recipients.
A clean team can limit access. It does not help if the information is later used by sales, procurement or pricing teams.
Interim covenants protect value between signing and closing. They must not make the buyer the operator of the target. Consent rights should focus on exceptional actions and remain proportionate.
Each consent right should have a documented rationale. The article on interim covenants explains the contract mechanics.
The SPA should address filing, standstill, responsibility and cooperation. Add a short protocol for clean-team access and authority communications.
A review should show who received which information and when. This improves traceability without replacing legal advice.
Do not operate jointly before closing: Even well-intentioned coordination can create risk. Review the data room and interim covenants before sensitive information is exchanged.
Merger-control care begins in the data room and ends at closing.
| Layer | Review | Record |
|---|---|---|
| Data Category and currency | Clean-team rules | Access log |
| Control Instructions and consent | Interim covenants | Approval matrix |
| Market Prices and customers | No coordination | Communication rule |
| Evidence Decisions | Filing and clearance | Closing file |
The permissibility of an exchange depends on its content, purpose, market and recipients.
No. Information needed for the transaction may be shared. Its scope, currency, purpose and recipients must be controlled.
The target generally remains independent. Contractual consent for exceptional actions may be possible, but day-to-day control is risky.
A limited group that reviews sensitive information for the transaction and does not pass it to operational teams.
When buying a company, structure, review and contract decide. Call us directly or send an email, callback within one business day.
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