Antitrust review has become one of the most unpredictable variables in modern M&A deal-making. Regulators in the United States and abroad are scrutinizing transactions more closely, and the length and outcome of that review can determine whether a deal ultimately closes. Merger agreements address this uncertainty through carefully negotiated efforts covenants that allocate the risk of regulatory delay or rejection between buyer and seller.

These covenants typically require a party to use “reasonable best efforts,” “commercially reasonable efforts,” or, in buyer-favorable deals, a “hell-or-high-water” standard to obtain antitrust clearance. The chosen standard dictates how much a buyer must concede to regulators, including whether it must divest assets or accept behavioral remedies to secure approval. Sellers generally push for the strongest possible commitment, since a failed deal can leave them without a transaction and with reputational or operational fallout.

A hell-or-high-water clause represents the most aggressive form of this commitment. It obligates the buyer to take virtually any action necessary to satisfy antitrust authorities, including divesting significant business lines, regardless of the impact on the combined company’s value. Buyers rarely agree to such terms without careful modeling of worst-case outcomes and often insist on carve-outs for divestitures that would be material to the deal’s strategic rationale.

More common are qualified efforts standards that cap a buyer’s obligations at a defined threshold, such as divestitures representing a specified percentage of combined revenue or EBITDA. These thresholds give buyers predictability while still providing sellers meaningful assurance that the buyer will pursue clearance in good faith. Negotiating the precise contours of these caps is often one of the most contested aspects of drafting the agreement.

Reverse termination fees frequently accompany efforts covenants as a further risk-allocation mechanism. If the deal fails because antitrust clearance cannot be obtained, the buyer may be required to pay a substantial fee to the seller, compensating for lost time and opportunity cost. The size of this fee often correlates with the perceived antitrust risk profile of the transaction and the strength of the efforts covenant negotiated.

Parties must also address the practical mechanics of the regulatory process, including cooperation obligations, information-sharing protocols, and control over litigation strategy if a regulator challenges the deal in court. Well-drafted provisions specify who leads negotiations with antitrust agencies and how decisions about proposed remedies will be made jointly or unilaterally.

As antitrust enforcement intensifies across multiple jurisdictions, the drafting of efforts covenants has grown increasingly sophisticated. Deal parties benefit from experienced counsel who understand both the legal standards at play and the practical realities of regulatory review, ensuring that risk allocation reflects the true dynamics of the transaction and the parties’ respective priorities.