Meaning of Jumping the Gun

Prior to close: 

  • Neither company can attempt to exercise control over the other
  • Cannot exchange competitively sensitive information
  • Must operate as separate entities until the transaction closes

Examples of Prohibited Activities:

  • No joint pricing, promotions, expansion plans (or influencing each other on these) 
  • No coordination on competitive practices, decisions or strategies
  • Can’t participate in or influence each other’s day-to-day operations
  • No joint decision-making on operational purchases or dispositions
  • Acquirer employees cannot act on behalf of Target employees, nor vice versa
  • No coordination on sales, purchasing or contracts with suppliers or vendors
  • No division of customers or markets between the companies
  • No implementation of integration plans prior to closing
  • No broad unfettered access to each other’s systems (email, reports, etc)
  • No access to office space or sales, marketing or operational personnel

Competitively Sensitive Information:

Before closing, an acquirer should not exchange competitively sensitive information with the other party. Examples of competitively sensitive information include:

  • Current or future prices, price schedules, pricing policies, pricing plans or terms of sale
  • Product-specific costs, including materials and third-party labor supply costs and national vendor contract terms
  • Customer and product-specific prices, profitability, profit margins, discounts or rebates
  • Vendor prices, profit margins, discounts or rebates
  • Competitive strategies, including:
  • Sales, bidding and marketing plans
  • Specific harvesting plans
  • Growth or expansion plans (including product and geographic markets)
  • Other strategic plans
  • Attempts to retain specific customers, land suppliers or materials/labor suppliers...

Slide titles:

Confidentiality Reminder

Pre Close Rules of Engagement

Competitively Sensitive Information

Activities Permitted Prior to Closing

Data Exchange Process

Pre Close Rules of Engagment

Prohibited Activities

Prohibited Activities: Examples

Additional Activities Permitted Prior to Closing

Competitively Sensitive Information - Examples