Material Adverse Change Clauses in Turkish M&A Deals: Can a Foreign Buyer Walk Away? – 2026 Updated Guide

MAC Clause in Turkey | Foreign Buyer M&A Rights

Learn when a foreign buyer can rely on a Material Adverse Change clause to terminate a Turkish M&A deal, recover the deposit or claim damages.

A foreign buyer may sign a Share Purchase Agreement and later discover that the target company has suffered a major financial, operational or legal deterioration before closing.

A Material Adverse Change clause, commonly called a MAC clause, may give the buyer a right to terminate the transaction or refuse to complete closing. However, a buyer cannot walk away automatically merely because the business became less profitable or market conditions changed.

The result depends on the wording of the SPA, the event, its impact on the target company, contractual exclusions and the buyer’s notice obligations.

This 2026 updated guide explains when a foreign buyer may rely on a MAC clause in a Turkish M&A transaction.

What Is a MAC Clause?

A Material Adverse Change clause identifies events that substantially and negatively affect the target company between signing and closing.

The clause may cover financial deterioration, loss of important customers, cancellation of key contracts, regulatory action, license loss, major litigation, insolvency, cyber incidents or serious damage to business assets.

Some SPAs use the term Material Adverse Effect instead. The practical question is whether the agreed event gives the buyer a contractual right not to close or to seek another remedy.

Does Turkish Law Automatically Create a Walk-Away Right?

No. There is no universal automatic right for a foreign buyer to abandon every Turkish M&A transaction after a negative development.

The buyer’s right normally arises from the SPA, closing conditions, representations and warranties, termination provisions or general contractual remedies.

The contract should be interpreted according to its wording, the parties’ intentions, commercial purpose and applicable mandatory rules.

What Events May Trigger a MAC Clause?

Potential triggering events may include a permanent loss of a key customer, cancellation of a material license, substantial undisclosed debt, serious regulatory restrictions, insolvency, destruction of critical assets or a major lawsuit threatening the business.

A significant cyberattack, loss of intellectual property, inability to operate or withdrawal of a required permit may also be relevant.

The buyer must establish that the event falls within the specific language of the clause and materially affects the target company.

Are General Market Conditions Usually Excluded?

Many MAC clauses exclude general economic, political, currency, inflation, interest-rate or industry-wide changes.

The buyer may still rely on the clause if the target company was affected disproportionately compared with similar businesses, if the SPA contains an exception or if the event is specifically listed.

A general decline in the market is usually more difficult to use than a target-specific event.

How Is Materiality Determined?

Materiality is not always determined by a single percentage. The court or arbitral tribunal may examine the effect on revenue, profit, assets, cash flow, customer relationships, licenses and future operations.

The duration of the impact is also important. A short-term fluctuation may not qualify, while a long-term deterioration affecting the company’s value may be more significant.

The buyer should obtain an independent valuation and financial analysis.

Can a Hidden Liability Trigger a MAC Clause?

A hidden bank loan, tax debt, employee claim, enforcement proceeding or related-party transaction may trigger a MAC clause if it materially affects the target company and falls within the SPA’s wording.

The buyer may also have separate claims for breach of warranty, indemnity, misrepresentation or fraud.

The buyer should not rely on the MAC clause alone where the undisclosed matter is covered by a specific contractual warranty.

What Should the Foreign Buyer Do After Discovering the Event?

The buyer should preserve the SPA, disclosure schedules, financial statements, due-diligence records, emails and data-room documents.

The buyer should identify when the event occurred, whether it existed before signing, when the seller learned about it and how it affects the company.

The seller should be notified in writing according to the SPA. The notice should clearly identify the event, the contractual provision and the buyer’s intended remedy.

Can the Buyer Refuse to Close?

If the MAC clause is a closing condition and the event satisfies its requirements, the buyer may have grounds to refuse closing or terminate the SPA.

However, the buyer should not unilaterally walk away without reviewing the clause. An unjustified refusal may expose the buyer to a deposit dispute, damages claim or allegation of breach.

The buyer should also check whether the agreement requires a cure period, negotiation, expert determination or formal notice.

Can the Seller Cure the Problem?

Some SPAs allow the seller to remedy the event before closing. The buyer should determine whether the proposed cure actually eliminates the financial or operational impact.

A temporary payment, replacement customer or short-term financing arrangement may not be sufficient if the underlying problem remains.

The seller’s ability to cure depends on the SPA and the nature of the MAC event.

Can the Buyer Claim Damages Instead of Terminating?

Yes. Depending on the SPA, the buyer may seek damages, indemnity, price adjustment or specific performance instead of termination.

A price reduction may be appropriate where the buyer still wants to complete the transaction but the company’s value has declined.

Potential losses may include due-diligence costs, financing costs, lost opportunities, deposit amounts and the difference in company value.

Can the Buyer Recover the Deposit?

If the buyer validly terminates under the MAC clause or another contractual provision, it may seek return of the deposit.

If the seller argues that no MAC occurred, the dispute may concern whether the event was material, excluded or caused by the buyer.

The buyer should preserve payment records and review the SPA’s deposit and termination provisions.

What If the Buyer Already Closed?

A MAC clause usually operates between signing and closing. Once closing has occurred, the buyer may no longer be able to use it to walk away unless the SPA expressly provides otherwise.

The buyer may still pursue warranty, indemnity, misrepresentation, fraud, price-adjustment or damages claims.

The acquisition structure, closing certificate and seller’s post-closing obligations should be reviewed.

Can the Seller Claim That the Buyer Caused the MAC?

The seller may argue that the deterioration resulted from the buyer’s conduct, delayed approval, financing failure or actions after signing.

The buyer should preserve evidence of its compliance with the SPA, transition plan, management instructions and pre-closing communications.

Causation may become a central issue if the target’s performance declined after the buyer became involved.

Can a MAC Clause Cover Regulatory or Political Change?

It may, depending on the wording. General regulatory or political changes may be excluded, while a target-specific license cancellation or government restriction may be included.

Foreign buyers should carefully review exclusions concerning currency controls, economic instability, sanctions, industry regulation and changes in law.

A clause drafted too broadly or too narrowly may create significant litigation risk.

Can Interim Protection Be Requested?

An interim injunction may be considered if the seller is transferring assets, destroying records, diverting customers or taking steps that affect the buyer’s contractual rights.

The buyer may also need protection over confidential information, escrow funds, company documents or transaction assets.

The court or arbitral tribunal evaluates urgency, evidence and proportionality. Security may be required.

What Evidence Matters in 2026?

In 2026, electronic data rooms, financial models, accounting systems, customer records, corporate emails, digital contracts and online regulatory communications may be decisive.

The buyer should preserve document versions, audit trails, meeting records and complete communication chains.

A financial, valuation or technical expert may help establish whether the event was material, target-specific and sufficiently long-lasting.

Can a Foreign Buyer Act from Abroad?

A foreign buyer does not always need to travel to Turkey. A Turkish lawyer may review the SPA, issue notices, negotiate termination, pursue arbitration or file court proceedings under a valid power of attorney.

Depending on the issuing country, legalization, apostille and official translation may be required.

Lawyer Fırat Fesih Kaya assists foreign buyers with MAC disputes, SPA termination, M&A damages, indemnity claims and commercial litigation in Turkey.

2026 Legal Considerations

Foreign buyers should define MAC events precisely before signing and identify exclusions, thresholds, cure rights, notice procedures and closing conditions.

After a material deterioration, the buyer should avoid informal waiver, continue preserving evidence and obtain a written legal assessment before refusing to close.

The applicable rules on M&A agreements, termination, damages, arbitration, company valuation, evidence and procedural deadlines should be reviewed before action is taken.

Frequently Asked Questions (FAQ)

1. Can a foreign buyer walk away from a Turkish M&A deal because of a MAC?

Potentially, if the event satisfies the SPA’s MAC definition and closing conditions.

2. Does every decline in revenue trigger a MAC clause?

No. The decline must usually be material, relevant to the target and not excluded by the SPA.

3. Are general economic problems usually excluded?

Many clauses exclude general market or economic changes, subject to negotiated exceptions.

4. Can hidden debt trigger a MAC?

A substantial undisclosed debt may trigger a MAC or support separate warranty, indemnity or misrepresentation claims.

5. Can the seller cure the MAC event?

Possibly, if the SPA provides a cure mechanism and the proposed cure genuinely removes the material adverse effect.

6. Can the buyer refuse to close without notice?

The buyer should comply with all SPA notice and procedure requirements before refusing to close.

7. Can the buyer claim damages instead of terminating?

Damages, indemnity or price adjustment may be available depending on the contract and proven loss.

8. Can the buyer recover its deposit?

A valid contractual termination may support recovery of the deposit, but the seller may dispute whether a MAC occurred.

9. Can a MAC clause be used after closing?

Usually, MAC clauses concern the period before closing. After closing, warranty, indemnity and damages claims may remain available.

10. Can a foreign buyer pursue the matter without traveling to Turkey?

In many cases, yes. A Turkish lawyer may act under a valid power of attorney.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Foreign Buyers

A MAC clause may protect a foreign buyer from completing a transaction after a serious deterioration in the target company, but the clause must be applied according to its exact wording.

Fırat Fesih Kaya Law Office provides professional legal support to foreign buyers in MAC disputes, SPA termination, M&A negotiations, indemnity claims, valuation disputes and commercial litigation.

Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey