MAC clause (Material Adverse Change)

The MAC clause (Material Adverse Change, sometimes MAE for „Material Adverse Effect”) bridges the risk of the gap between signing and closing a purchase agreement. If revenue, asset position or another defined state of the target materially deteriorates during this window, it can grant the buyer a withdrawal right or a purchase-price adjustment.

In insolvency, the MAC clause is especially contentious: since the target is by definition already in distress, administrators reject broad, subjectively worded clauses — they would hand the buyer a pretext to exit almost any deal, further endangering the already fragile going-concern viability. Instead, narrowly framed, objectively measurable triggers are standard (loss of a named key customer, revocation of an operating licence, failure of mass-loan financing).

For buyers, the MAC clause is a central negotiation point in the bidding process: too narrow a scope leaves real deterioration risk with the buyer, too broad a scope is rarely accepted by the administrator because it undermines the bindingness of the bid. In practice, a list of concretely defined trigger events usually wins out over a general catch-all clause.