M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Tuesday, June 25, 2013

Smithfield...MAC in the making?

Get this ... Buzzfeed breaks merger news:  Will Shuanghui back out of the Smithfield transaction now that Smithfield has walked away from Paula Deen? For those of you not paying attention, here's all the Paula Deen news you could possibly want.  My guess is that Shuanghui is acquiring Smithfield for reasons that have nothing to do with Ms. Deen.

If you take a long term view of the economics driving Shuanghui's acquisition, losing Ms. Deen isn't even a blip on the radar. Given the standard that for a court to determine there has been a material adverse change sufficient to permit a buyer to walk, the event in question has to be one that "substantially threatens the overall earnings potential of the target in a durationally-significant manner."  Frankly the loss of Ms. Deen just doesn't meet that standard, especially when one looks at the access Smithfield will have to new export markets in Asia once the aquisition is completed.



Material Adverse Change Clauses | Permalink

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