Delaware Chancery Invalidates Buyer Termination And Orders Specific Performance Of Obligations To Seek Regulatory Clearance For Merger

On August 7, 2026, Vice Chancellor Bonnie W. David of the Delaware Court of Chancery held in a post-trial decision that a software and data analytics company (the “Acquiror”) was not entitled to walk away from its $2.35 billion proposed acquisition of a cloud-based roofing business management platform (the “Target”) based on antitrust regulators’ failure to approve the deal by the merger agreement’s outside termination date. Verisk Analytics, Inc., v. AccuLynx.com, No. 2026-0023-BWD (Del. Ch. Aug. 7, 2026). The Vice Chancellor invalidated the Acquiror’s purported termination of the merger agreement because its own “willful conduct” was the “primary cause” of the failure to obtain timely antitrust clearance. The court ordered specific performance of the Acquiror’s obligations to seek antitrust clearance and to close if such clearance is obtained.

The deal was subject to Federal Trade Commission (“FTC”) approval under the Hart-Scott-Rodino Act, although the parties believed that the merger presented minimal antitrust risk. Shortly after the deal was announced, however, the Acquiror abandoned discussions with a competitor of the Target about a potential “enhanced integration” of its product offerings. Unbeknownst to the deal parties, the competitor complained to the FTC, leading the FTC to develop a “market reset” theory of competitive harm centered on the Acquiror’s purported plans to offer enhanced integration to the Target while denying it to its competitors. The FTC pursued this “novel” theory through its initial investigation and a second request, with which, after a “quick look” initial review, the FTC demanded full compliance. Without antitrust clearance to close, the Acquiror purported to terminate the merger agreement on its outside date.

The Acquiror sought a declaration that its termination was valid, while the Target argued that the Acquiror was not entitled to terminate because its “willful conduct” in abandoning discussions with the competitor was the “primary cause” of the FTC’s expansive second request. The Acquiror argued that “willful conduct,” as used in the merger agreement, should require “blameworthiness,” which was not present because it had spent roughly $8 million and met with the FTC approximately 30 times attempting to comply with the agency’s requests. 

Reading the merger agreement as a whole, the Court rejected these arguments and held that by juxtaposing “knowing and willful breach” in one clause with “willful conduct” in another, the parties intended for “willful conduct” to mean only voluntary and intentional conduct, without requiring blameworthiness or an intent to scuttle the deal. The Acquiror further argued that its abandonment of discussions with the competitor was not the “primary cause” of the FTC’s actions. The Court also rejected these arguments, pointing to evidence that the competitor was in repeated contact with the FTC during the investigation and the only non-party the FTC subpoenaed. After rejecting the Acquiror’s arguments that its termination was valid, the Court awarded specific performance based on the merger agreement’s stipulation to equitable relief, as well as $3.85 million in direct costs.