This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Picture the week after signing. A Florida distribution company has agreed to sell to its largest regional competitor. Closing is sixty days out. The buyer’s CEO — friendly, energized, already talking about “our combined platform” — asks for three things: a weekly call to review the target’s open customer quotes, sign-off before the target extends any pricing below list, and a desk in the warehouse for the buyer’s operations manager, just to get a head start. Every one of those requests feels like reasonable integration planning. Every one of them is a version of the conduct that produced the largest gun-jumping penalty in the history of the Hart-Scott-Rodino Act.
Until closing, the law says you are still competitors
The signed purchase agreement changes less than people think. Until the deal closes, buyer and seller remain separate companies, and if they compete, they remain competitors subject to Section 1 of the Sherman Act. Florida has its own mirror: section 542.18 of the Florida Statutes provides that “every contract, combination, or conspiracy in restraint of trade or commerce” in the state is unlawful, and chapter 542 is expressly construed in harmony with the federal case law. Two competitors agreeing on prices between signing and closing is price-fixing with a merger agreement stapled to it — the merger agreement is not a defense.
For reportable deals there is a second, independent layer. The HSR Act bars the buyer from acquiring beneficial ownership — including operational control in substance — before the waiting period expires. That is the “gun-jumping” charge in its technical sense, and the meter runs daily: the current maximum civil penalty is $53,088 per day, adjusted annually. A Florida middle-market deal under the 2026 size-of-transaction threshold of $133.9 million may never file an HSR form, but that exempts nobody from the Sherman Act or from chapter 542. Sub-threshold deals between competitors carry real coordination risk with no waiting period to mark the danger zone — which, if anything, makes the discipline easier to forget.
A record penalty drew the map of what not to do
In January 2025, the FTC against XCL Resources, Verdun Oil, and EP Energy, arising out of a $1.4 billion crude-oil acquisition. According to the complaint, the purchase agreement itself handed the buyers operational control at signing: EP had to stop planned well-drilling activity, buyer approval was required for ordinary-course expenditures above a modest threshold, and the parties coordinated on customer contracts and deliveries in one region and on prices to EP’s customers in another. When supply tightened, the buyer was effectively directing the target’s production and sales months before the waiting period expired. The agencies counted 94 days of violation. What makes the case so useful is that none of the conduct sounds exotic — it reads like an integration checklist executed too early, which is exactly what it was.
The interim covenant can protect value without taking control
Buyers have a legitimate problem the covenant is meant to solve. The buyer is paying today’s price for a business the sellers will run for another sixty or ninety days, and it wants the company it priced to be the company it receives. The law accommodates that. The line — drawn across decades of consent decrees and confirmed in the XCL matter — is between negative protections and affirmative control. A covenant that the target will operate in the ordinary course, won’t sell material assets, won’t grant blanket raises, won’t amend its top contracts without consent: standard, defensible, and the subject of its own drafting fights, which I’ve covered in the context of interim-period breach disputes. A covenant that gives the buyer approval rights over ordinary-course pricing, customer-by-customer decisions, or routine operating expenditures crosses into running the business — the thing the buyer may not do until it owns it.
The drafting discipline is to tie consent rights to extraordinary actions, set dollar thresholds high enough that day-to-day operations never hit them, and never — in any deal, any size — give the buyer a voice in the target’s pricing to customers the buyer also serves. If a consent right would let the buyer influence competition between the two companies during the interim period, it belongs out of the agreement.
Information wants a filter, and integration wants a calendar
The same line runs through diligence and integration planning. Financial statements, contracts, litigation history, org charts: ordinary diligence, exchanged under an NDA, unremarkable. Current customer-level pricing, margin by account, pending bids, forward pricing plans: competitively sensitive, and exchanging it raw between competitors is a Section 1 problem even if the deal later closes — and a worse one if it doesn’t. The standard architecture is a clean team: sensitive data goes to outside advisors or designated personnel walled off from the buyer’s commercial decision-makers, aggregated or historical where possible, with the raw feed opening only at closing. And integration planning is legal while integration execution is not: designing the combined org chart is planning; announcing the target’s new reporting lines to its employees before closing is execution. Joint sales calls, joint bids, coordinated customer communications — all execution, all premature until the wire clears.
It’s worth remembering that the documents generated during this window have an afterlife. Deal-team emails and integration decks are exactly what the agencies read — in reportable deals they arrive with the filing itself, as I covered in the Item 4 documents post — and an email from the buyer’s COO “approving” the target’s discount to a shared customer is the whole case, self-documented.
What the space between should look like
Run the opening scene again, done right. First, the weekly quote-review call doesn’t happen; in its place, the target reports ordinary-course performance metrics monthly, at a level of aggregation a competitor could safely see. Second, no pricing consent right exists — the interim covenant restrains extraordinary actions with thresholds that ordinary operations never touch, and the target prices its own business until closing. Third, the buyer’s operations manager gets no desk; integration planning happens in scheduled sessions with counsel aware of the agenda, and execution waits. The deal that closes on those terms closes clean — no penalty exposure accruing daily, no Section 1 theory for a competitor or customer to borrow later, and no regulator reading the interim covenant as evidence, in deals with antitrust risk of their own, that the parties treat the line casually — a bad look when the agreement’s regulatory-efforts provisions, like the ones in my divestiture-cap post, are already under the microscope.
In most cases, gun-jumping compliance costs a deal almost nothing — a few covenants drafted with thresholds, a clean-team protocol, sixty days of patience. The record shows what the alternative costs, and the record is public.
If you are between signing and closing and unsure where integration planning ends and jumping the gun begins, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
