Delaware Court Finds Material Adverse Effect Allowing Buyer to Terminate Merger Agreement

November 2018


The Delaware Court of Chancery’s opinion in Akorn, Inc.v. Fresenius Kabi AG constitutes what is believed to bethe first decision of a Delaware court permitting a buyerto terminate a merger agreement due to the occurrence ofa material adverse effect. While the headline holding issignificant in and of itself, the Court’s analysis is groundin existing Delaware precedent and it must be viewedin light of the extensive factual record Corporations andpractitioners are cautioned, however, that the decision hasbeen appealed to the Delaware Supreme Court.

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