Brexit-related MAC clauses absent in seller’s market – M&A lawyers

31 July 2018 - 12:00 am UTC

So-called “Brexit clauses” are still absent from deal terms as cash-flushed corporates and sponsors tilt M&A transactions in favour of sellers, according to M&A lawyers. M&A transaction documents were widely expected to include “Brexit clauses”, or a variation of a MAC (also known as a Material Adverse Change or Effect) to assign risks, caused by Brexit, between the parties to an M&A deal.

Hogan Lovells describes a “Brexit clause” as a contractual provision which triggers some change in rights/obligations as a result of a defined Brexit-related event. Clauses could be triggered in the event of a loss of UK passporting benefits, increased tariff costs, or EU-UK legal divergence, legal notes have argued.

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