Material Adverse Change or Effect

(redirected from Material Adverse Change Clauses)

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 ?
Material Adverse Change Clauses in Today's Acquisition Environment, 71 U.
We will commit, close and rate lock transactions, and there are no material adverse change clauses in loan applications and commitments.
Such hazards include the tendency to hedge exposures with different counterparties while underwriting one's own risk on the basis of the net exposure (assuming performance by both the initial derivative and the hedged derivative), and the existence of credit cliffs inherent in downgrade triggers or material adverse change clauses that may invoke termination rights on the part of performing derivative counterparties, but not on the part of the party that suffered the downgrade or material adverse change.
But it also said Marconi had not received any correspondence from banks suggesting it had triggered material adverse change clauses that could threaten its vital credit facilities.
The credit agreements contain no material adverse change clauses, and substantial cushion exists with respect to the 35% debt-to-capital ratio and $6.
1 billion, further supported by USD600 million of undrawn stand-by credit lines due in 2013 and 2016, without material adverse change clauses, while short-term debt reached BRL1.
Usiminas also benefits from a US$300 million committed liquidity facility available until July 2010 without material adverse change clauses for drawdowns.
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