Material Adverse Change or Effect

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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 ?

A Brexit-related MAC clause would only be needed if a purchase deal was made to acquire Charter Court prior to 23 June 2016, the date of the UK referendum, although a number of businesses are delaying auctions until after the poll.

Bidders for Precise Mortgages seek "Brexit clause" prior to referendum

Deals in the UK were the least likely to have a MAC clause (only 3%).

Pro-Seller Deal Structures Spur European M/A Activity, According to CMS

Some acquiring companies have utilized the MAC clause to walk away from a deal because the target became less attractive during the interval period (Herman and Piereck, 2010).

Mergers and acquisitions: termination fees and acquisition deal completion

QNB will not use the MAC clause it said in its conference call and already pencilled in a potential fall in the EGP/USD to 7.

Arqaam Capital highlights arbitrage opportunities on NSGB and Tamweel

the available US swing line that does not have a MAC clause, which is

Moody's assigns Prime-1 to CNPC Finance (HK)'s US CP program

A MAC clause is a clause typically requested by the purchaser of a business to be inserted into a sale and purchase agreement (SPA).

MAC clause: the contract clause that leaves prospective buyers holding all the aces

In 2007, a MAC clause led to a reduction in the sale price for

Strategic vagueness in contract design: the case of corporate acquisitions

will not only permit a court to indulge its tendency to interpret a MAC clause narrowly, but will affirmatively count against an inclusion of that topic in the MAC definition." (citing N.

Failure of a "basic assumption": the emerging standard for excuse under MAE provisions

Bank of America shareholders approved the agreement with the MAC clause December 5, 2008.

Did Bernanke and Paulson commit bank fraud?

After the shareholder vote is held, the party will have to rely on the MAC clause to protect it against downside deal risk.

The economics of deal risk: allocating risk through MAC clauses in business combination agreements

particular, the MAC clause. Finally, negotiate remedies that provide

Lessons to Potential Sellers: Channel Your Energy into Negotiating Strong Documents; by Lynette K. Oyster

Another way to navigate the lending process with some order is to lock in the entire loan coupon by effectively buying out the MAC clause language in the loan agreement.