Material Adverse Change or Effect

(redirected from Material Adverse Change)
Also found in: Acronyms, Wikipedia.

Material Adverse Change or Effect

Many mergers and acquisitions contracts include a material adverse change clause that allows a company to renegotiate or walk away from a deal if the other company or its subsidiaries announces a significant event that may negatively affect its stock price or operations. See also materiality.

Material Adverse Change or Effect

A clause in some merger and acquisition contracts allowing the acquiring to cancel a deal before it is finalized if material information is revealed that negatively impacts the target company's stock price. See also: Due diligence.
References in periodicals archive ?
As stated in the motion, "this is a classic case of the purchaser improperly invoking a material adverse change provision to attempt to avoid its obligations to acquire a business after having buyer's remorse over the price it had agreed to pay.
The transaction is subject to customary closing conditions, including the approval of Sentigen's stockholders, the continuing accuracy of Sentigen's representations and warranties, the lack of any material adverse change to Sentigen and the execution by Sentigen's Chief Executive Officer of an employment agreement mutually satisfactory to the Chief Executive Officer and Invitrogen.
Fitch notes that the amendment to the credit agreement indicates should there be a declaration of material adverse change it would not prevent Lennar from drawing down its revolver for the specific purpose of paying off its outstanding commercial paper.
Full browser ?