Eyeing Emergency Exits From Mergers in Anxious Times
ByThe merger escape hatch may be about to open.
President-elect Donald J. Trump’s unnerving tweets and fickle policy ideas add to the angst already undermining transactions like Abbott Laboratories’ $5.8 billion acquisition of Alere, a medical test maker. Buyers seek solace in material adverse change, or MAC, clauses, which offer the potential to wriggle out of a deal between signing and closing, but the provisions are almost never enforced in court. That may be about to change.
Surprises are inevitable, especially as the merger cycle turns downward. Abbott is crying MAC after Alere unexpectedly delayed filing financial statements, revealed billing-practice and bribery investigations and revised its financial results. A gigantic hack of email users at Yahoo is shaking Verizon Communications’ desire to complete its $4.8 billion takeover of the internet firm’s core business…
Eyeing Emergency Exits From Mergers in Anxious Times
