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Antitrust Alert: U.S. DOJ Brings "Gun Jumping" Enforcement Action and Imposes Civil Penalties

Kathryn M. Fenton et al., Jones Day Antitrust Alert, January 2017

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"Gun jumping" occurs when companies that are planning a merger coordinate their business activities before the Department of Justice or Federal Trade Commission has completed its antitrust review of the transaction under the Hart-Scott-Rodino (HSR) Act. The U.S. antitrust agencies aggressively enforce the prohibition on "gun jumping," as reflected in this month’s DOJ challenge to premerger coordination between Duke Energy and the electricity generating business it proposed to acquire. DOJ settled the challenge with Duke paying $600,000 in civil penalties.

This case illustrates that interactions between merging parties involving what otherwise might be considered ordinary course business transactions may need special scrutiny in the merger context. It also highlights the importance of carefully drafting party documents and monitoring party statements before other regulatory agencies, which may be scrutinized for evidence of premerger coordination.

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