MAC Clause In International M&A Agreements

Material Adverse Change(MAC),as a common problem in international commercial affairs.It is considered as a very important concept in international M&A,because almost all cross-border M&A agreements include the MAC clause.In addition,both parties also spend lots of time on negotiation and compilation of this clause.Since the MAC clause proposes a high requirement for logical thinking and compilation skills of lawyers,it is difficult for acquisition business personnel in trading and lawyers with insufficient experience to have the in-depth understanding on it.First of all,beginning with the evolution of the MAC clause,the MAC clause was summarized in detail from application purposes,components and criteria.According to event properties and different influence degrees,criteria of the MAC clause were inconsistent.Based on different theories and utilization methods,this paper introduced the criteria of the MAC to respectively explain the basic connotations of the MAC clause from "material","change" and exception.Then,starting from the American famous trading "Exxon Mobil—XTO" case,the author analyzed the specific application and stipulations,explained the case background and compilation skills,and proposed the corresponding suggestion its improvement.Furthermore,by introducing Tyson Foods Inc.case,the author emphasized the importance of hearing logics in the court and proposed an idea that lawyers should consider and solve problems from different standards of trading parties through multi-angle reflection,and made an intuitive and clear form in line with existing information.Finally,by combining with national conditions,the author proposed the own suggestion on China-invested enterprises' overseas acquisition and acquisition agreements drafted by Chinese lawyers and recommended abuse of the MAC clause,hoping to help to explore a correct road for acquisition practice of China-invested enterprises.The author hoped to give some experience enlightenment on Chinese acquisition practitioners through discussion and to compensate for blank in relevant domestic data.