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Abstract Recently, Huang and co‐workers reported a catalytic reaction that utilizes H₂as the sole reductant for a C−C coupling of allyl groups with yields up to 96 %. Here we use computational quantum chemistry to identify several key features of this reaction that provide clarity on how it proceeds. We propose the involvement of a Pd−Pd bound dimer precatalyst, demonstrate the importance of ligand π‐π interactions and counterions, and identify a new, energetically viable, mechanism involving two dimerized, outer‐sphere reductive elimination transition structures that determine both the rate and selectivity. Although we rule out the previously proposed transmetalation step on energetic grounds, we show it to have an unusual aromatic transition structure in which two Pd atoms support rearranging electrons. The prevalence of potential metal‐supported pericyclic reactions in this system suggests that one should consider such processes regularly, but the results of our calculations also indicate that one should do so with caution.