MAC - Material Adverse Change Clause in Sales and Purchase Agreement (M&A)

Material Adverse Change ("MAC") - "Significant Adverse Change"

In recent years, so-called Material Adverse Change or MAC clauses have also been included in contracts for the acquisition/sale of companies in German-speaking countries. The background to this is the distinction between signing and closing in company purchase agreements and the sometimes long period of time that lies between signing and closing (transfer to the buyer). The purpose of MAC clauses is to protect the buyer from negative developments in the company he wants to buy.

Negative developments can be: Drop in turnover, drop in EBITDA, loss of important customers, etc.... When defining the MAC clauses in the company purchase agreement, care should be taken to ensure that such "significant negative changes" are defined in a comprehensible manner: e.g. sales slump of more than 15%, EBIT slump of more than 20%, etc.. Buyers prefer MAC clauses in company purchase agreements that are broad and not very specific.

Buying a company/ Selling a company - SPA negotiations - MAC clause

The better the negotiating position of the seller in the contract negotiations, the more likely the seller will be able to enforce that no MAC clause is included at all or that a very "broad" definition of "material adverse change" is made and that the cases of a material adverse change are to be influenced by the company - and not triggered by external influences such as "fire", "earthquake", "attack", etc.

If a material adverse change defined via a MAC clause occurs, the buyer has the right to withdraw from the purchase contract.
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Phone +49 89 21536609-0
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KP Tech has been providing consulting services for more than 20 years with a focus on company acquisitions, company sales, company succession, equity capital and company valuation. Our clients include small and medium-sized companies as well as international groups and private equity companies. Most of our clients come from the technology, services and consumer (including e-commerce) & healthcare sectors.


KP Tech is a member of the Association of German M&A Consultants (VMA), a non-profit alliance of prominent partner-led and independent M&A consulting firms (Frankfurt/Main).