Definition for : Material adverse change clause

Material adverse change clause, a part of every Merger or acquisition transaction, is intended to protect buyers from a dramatic short-term deterioration in the target company's business. Gives a buyer the right to terminate the agreement before its completion or at least to renegotiate its terms, if events occur that are detrimental to the business/Assets of the target company.

(See Chapter 43 Corporate governance of the Vernimmen)

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