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<p>Material Adverse Change (MAC) clauses in takeover offers provide bidders with the right to withdraw from a transaction if a predefined, materially adverse event occurs during the offer period. In the United States, such clauses are key components of offer conditions and played a prominent role in the termination of numerous deals at the onset of the COVID-19 pandemic. This study presents the first comprehensive analysis of the prevalence, structure, and economic implications of MAC clauses in the context of German takeover offers. Based on a sample of 168 voluntary offers, we find that the inclusion of MAC clauses is associated with higher levels of information asymmetry, elevated market risk, and weaker prior performance. Furthermore, our results indicate that target shareholders are compensated for granting bidders a de facto “walk-away” option through higher offer premiums. Finally, we find that the presence of a MAC clause significantly increases the likelihood of offer renegotiation or withdrawal.</p>

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MACs matter: the impact of material adverse change clauses on corporate takeover dynamics in Germany

  • 期刊论文

  • 发表日期：

    2025年10月9日

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  • Kwabena Osei,
  • Philipp Pollmann,
  • Bernhard Schwetzler

摘要

Material Adverse Change (MAC) clauses in takeover offers provide bidders with the right to withdraw from a transaction if a predefined, materially adverse event occurs during the offer period. In the United States, such clauses are key components of offer conditions and played a prominent role in the termination of numerous deals at the onset of the COVID-19 pandemic. This study presents the first comprehensive analysis of the prevalence, structure, and economic implications of MAC clauses in the context of German takeover offers. Based on a sample of 168 voluntary offers, we find that the inclusion of MAC clauses is associated with higher levels of information asymmetry, elevated market risk, and weaker prior performance. Furthermore, our results indicate that target shareholders are compensated for granting bidders a de facto “walk-away” option through higher offer premiums. Finally, we find that the presence of a MAC clause significantly increases the likelihood of offer renegotiation or withdrawal.