Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Saturday, September 22, 2007

KKR and Goldman Sachs Walk out of Harman LBO

Will KKR and Goldman Sach's walking away from the $8 billion LBO of Harman International Industries start a trend?  Citing financial conditions within Harman, the buyers invoked the Material Adverse Change Clause (MAC) to back out of the deal.  The contract language does not give the buyers much leeway: according to the Wall St. Journal, it states, in part, that the buyers can't walk for issues "generally affecting the consumer or professional audio, automotive audio, information, entertainment or infotainment industries, or the economy or financial, credit or securities markets in the United States or any other country."  WSJ, KKR, Goldman Cancel $8 Billion Harman Deal.

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