Material Adverse Change clauses: how much protection do buyers really have?
03 Jul 2025
Material adverse change or effect (MAC) clauses are a common feature in M&A transactions, especially in the public M&A space. These clauses are intended to protect buyers by allowing them to walk away from a transaction if a significant negative event affects the target company between signing and closing. In theory, MAC clauses provide a safeguard against unexpected developments following signing that could undermine the value of the target. However, in practice, their effectiveness for buyers is often limited (as further explained below).