- June 24, 2021
- Posted by: Stratford Team
- Category: Business
COVID-19 continues to have a major impact on every aspect of our lives. M&A is no exception. Business and market changes due to the pandemic are likely to impact our interpretations of common terms in merger agreements – such as material adverse change (“MAC”), material adverse event (“MAE”), force majeure, and ordinary course of business – for the foreseeable future.
Material Adverse Change
In a typical merger agreement, the buyer’s obligation to close will be subject to a MAC clause and some of the seller’s representations and warranties will be qualified by a MAE provision. Many practitioners are redrafting market MAC and MAE provisions to expressly include “pandemic” and broader economic or market changes resulting from a pandemic. This is particularly important as it appears likely that the pandemic has become a systemic general market risk.
In a landmark case, Akorn, Inc. v. Fresenius Kabi AG, et al., Memorandum…
