Until a few months ago, material adverse change (MAC) — a standard clause in mergers & acquisitions (M&A) that allows buyers to withdraw from deals without penalty if the value of the transaction has been undermined by a significant development — was hardly ever contemplated.

But since the Covid-19 health crisis morphed into one of the deepest economic downturns in generations, the clause has been thrust into the spotlight, raising questions about whether buyers are using the pandemic to negotiate lower prices or exercising their rights to get out of a deal that no longer makes commercial sense...

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