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 ?
Of note, however, is that break options may attract a break fee payable by the party exercising the break.
The arrangement agreement provides that Epicore will pay Neovia a break fee in the amount of CDN 1.
A group of lawyers representing Brazilian Neymar visited La Liga in Madrid on Thursday to try to settle the transfer and pay the 222 million euro break fee.
5 billion break fee payable by Halliburton to Baker Hughes as a result of its failed acquisition of the oil and gas services giant.
If not exercised within five months, the option will lapse and the Seller will be obliged to pay a break fee of 15 million [pounds sterling].
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 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.