Break Fee

Break Fee

1. In a contract between two parties, an amount of money one party may pay the other in order to agree to dissolve the contract. In many cases, the amount of the break fee is contained in the contract itself. It may diminish over time, depending on the nature of the contract. Break fees are common in leases.

2. In mergers and acquisitions, a fee the target pays to the acquirer in case a deal fails before completion. Theoretically, this is done to reimburse the acquirer for due diligence expenses, but, in practice, it is often used to attempt to restore good relations between the two companies.
Mentioned in ?
References in periodicals archive ?
Axis was set to receive a USD315m break fee for the termination of its deal with PartnerRe.
The only change by Monsanto is to add a wholly inadequate reverse regulatory break fee.
Basingstoke-based Shire, best known for its drugs to treat attention deficit disorder, will receive a break fee of $1.
If La Ronge terminates the transaction, the deposit will be treated as a break fee payable to Canfrac in exchange for equity in the amount of 22 percent of Canfrac's issued common shares and a nominee to Canfrac's Board of Directors.
The Parties have agreed to a break fee arrangement in terms of which
The deal with Shell includes a break fee of pounds 11.
G4S said it had incurred pounds 50m of costs so far related to financing, though it will not pay a break fee to ISS for ending the deal.
Some provinces allow the landlord to charge a re-rental fee, or a lease break fee, if you move out without providing the proper amount of notice.
A break fee of EUR20m will be payable in certain circumstances if the merger does not go ahead.
CVC must be given the chance to match any higher offer, but if it declines it will receive a pounds 175m break fee.
CVC must be given the chance to match any higher offer but if it declines it will receive a pounds 175 million break fee.