The Seventh Circuit Court of Appeals recently offered rare and detailed guidance on how merging competitors may share sensitive information during the due diligence process without violating antitrust proscriptions.

Due diligence and other aspects of information-sharing between competitors involved in M&A activities have long been necessary, but sometimes risky, activities. Directors and executives often have good reasons to seek competitively sensitive information about potential merger partners or acquisition targets, before making final decisions on price or suitability. Transaction counsel generally warn that the very process of sharing that information, however, may lead to allegations of conspiracy or gun jumping if the transaction craters and the parties revert to being competitors. Even if the transaction is consummated, if the preclosing period is lengthy, customers or vendors may allege that the parties engaged in gun jumping by sharing information that helped them collude prior to closing.