On May 31, 2018, the European Court of Justice provided welcome guidance on the scope of the gun jumping prohibition (i.e., standstill obligation) under the EU Merger Regulation.
The ECJ held that preparatory steps taken by merging parties to close a transaction that is subject to merger review prior to obtaining clearance will only constitute gun jumping if those actions contribute to a change in control of the target. While the judgment gives merging parties more leeway with regards to certain preparatory steps to close a transaction, the test is somewhat vague, and continued caution is thus advisable.