What is a hell-or-high-water clause?
A hell-or-high-water (HoHW) clause requires the buyer in an M&A deal to take all actions necessary to obtain antitrust and competition approvals: including agreeing to any divestiture, behavioural remedy, or hold-separate order regulators demand: with virtually no carve-out. The clause shifts almost all regulatory risk to the buyer and is one of the strongest “deal-certainty” provisions a seller can negotiate.
Spectrum of antitrust efforts standards
- Hell-or-high-water: buyer must do whatever it takes: including any divestiture: no materiality threshold.
- Reasonable best efforts with cap: buyer obligated to use reasonable best efforts up to a defined cap (e.g., divestitures up to X% of revenue or specific asset list).
- Reasonable best efforts (no cap): middle ground; courts interpret materiality.
- Commercially reasonable efforts: weaker; buyer-friendly.
- No obligation: rare; seller bears all regulatory risk.
When HoHW is demanded
- Strategic mergers with significant overlap: sellers demand HoHW because the buyer’s interest in completion is highest.
- Auctions with multiple bidders: stronger antitrust commitments differentiate bids.
- Cross-border deals: EU, US, China, UK, Türkiye approvals can each demand remedies.
Reverse termination fee interplay
Even with HoHW, deals often include a reverse termination fee payable to seller if the buyer fails to obtain approvals. The RTF caps the buyer’s downside; without it, HoHW could expose buyer to specific performance demands or large damages.
Türk işlemlerde Rekabet Kurulu
Türk Rekabet Kurulu (4054 sayılı Kanun) eşik üzeri işlemlerde ön onay zorunluluğu getirir; HoHW veya benzer antitrust efforts standartları Rekabet Kurulu izni de dahil tüm yargı bölgelerini kapsayacak şekilde düzenlenir. Türk işlemlerde uluslararası alıcılar genelde HoHW-altı bir standart talep eder (örn. “best efforts subject to material adverse divestiture exception”).
Do: negotiate the antitrust efforts standard with specific carve-outs (revenue thresholds, specific business segments) where divestitures would be deal-killers; pair with a meaningful reverse termination fee.
Don’t: agree to HoHW lightly: it can force buyer into divestitures or behavioural remedies that materially reduce deal value.
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