Key Points:
Despite their popularity, it is widely accepted that it
is notoriously difficult to establish that a material adverse
change (MAC) condition has been triggered.
2011 saw increasing reliance by bidders on conditions in their
deals to protect themselves from the volatile markets and uncertain
economic environment and there is no reason to think 2012 will be
any different. Among the many conditions bidders relied on, 78% of
public M&A deals announced in 2011 included a condition that a
material adverse change (MAC) did not occur in
respect of the target or its business. i
Despite their popularity, it is widely accepted that it is
notoriously difficult to establish that a MAC condition has been
triggered. Various authorities both here, in the UK and the US have
established that it is only significant events which have a
material and sustained effect on the target that can give rise to a
MAC. While those circumstances are rare, they do happen and
