Unexpected Severe Events – Learnings from the Pandemic for Swiss Law M&A Transactions

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The pandemic had various impacts on M&A practitioners, one being that attorneys quickly updated their transactional documents to consider the new “normal” – a more volatile business environment. The typical general areas of concern are the definitions of the material adverse change (MAC) or material adverse event (MAE) clause (which would provide the buyer with the right to walk away from the deal should events occur that are detrimental to the value of the target company) and the carve-out from the obligation to operate the business “in the ordinary course” in case unexpected severe events occur. These trends also saw the emergence of Covid-19-related M&A case law in the Delaware Court of Chancery in the US.