The EU Court of Justice clarifies the scope of gun jumping prohibition by excluding cooperation agreements which don’t contribute to the change in control of the target business (EY / KPMG)

EUROPEAN COURT OF JUSTICE CLARIFIES SCOPE OF GUN JUMPING PROHIBITION* Over the last year, we have noted an increased crackdown by competition agencies on so-called “gun jumping” – that is, the implementation of a merger before mandatory merger clearances are received. On 31 May 2018, the European Court of Justice (“ECJ”) provided an important clarification on the scope of the gun jumping prohibition under EU merger control and held that steps taken by businesses subject to a merger review that do not give the purchaser any control over the target will not amount to gun jumping. Background In 2013, a number of KPMG and Ernst & Young (“EY”) companies entered into a merger agreement in relation to their Danish auditing activities. This transaction was subject to review by the Danish