M&A Transactions in Times of Corona: Is COVID-19 a Material Adverse Change (MAC)?

by Moritz Maurer, Katalin Siklosi

The rapid spread of COVID-19 (declared a pandemic by the World Health Organization (WHO) on 11 March 2020) is hitting the economy and companies hard. The negative impact of COVID-19 is widespread, with almost all industries recording significant declines in sales and profits.

In connection with M&A transactions, the negative economic impact of COVID-19 raises the question of whether the outbreak represents a so-called material adverse change (MAC), and whether purchasers can derive certain rights from it.