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 ?
Other unknown or unpredictable factors could also have material adverse effects on our future results and noassurance can be given that any expectations expressed by Anglo Gold Ashanti will prove to have been correct.
Although Harvest believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined Company.
AMER has provided the company with a letter indicating that AMER is considering terminating the Agreement based on alleged uncured material adverse effects and alleged breaches of the Agreement by the company.
There is no assurance that the production lines at Aoxing will resume as expected and the renewal of GMP certificates will occur when anticipated, or even if such certificated are renewed, the Company will be able to return to the anticipated production levels, which, in turn, may have material adverse effects on our business, operations, financial performance and value of its securities.300460704.html
However, legal experts have noted that interpretation of contractual clauses citing material adverse effects or changes can be problematic.
The bank had very limited exposure to the agricultural sector and the floods have not directly caused any material adverse effects on portfolio quality.
Dave Johnson, national leader of Ernst & Young's executive compensation practice, says that since the SEC regulations talk about "material adverse effects," companies should keep in mind the concept of materiality.
In the end, proxies this year may say relatively little about compensation-related risks given the wording of the SEC regulations, which say companies should disclose whether pay plans are "reasonably likely to have a material adverse effect on the company."
They also say transfer requirements, which operate to protect the investor's interest, ensure investors do not suffer any material adverse effects from the removal.
Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements.
1, 2018, the Delaware Chancery Court handed down a 247-page decision recognizing that Fresenius Kabi AG had a contractual right to terminate its acquisition of generic pharmaceutical manufacturer Akorn pursuant to two separate "material adverse effect" clauses in the parties' merger agreement.
Section 6.02(a) established that, as a condition to closing, Akorn's representations and warranties "shall be true and correct except where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect."
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