In the fields of mergers and acquisitions and corporate finance, a material adverse change, material adverse event (MAE), or material adverse effect is a change in circumstances that significantly reduces the value of a company. A contract to acquire, invest in, or lend money to a company often contains a term that allows the acquirer, investor, or lender to cancel the transaction if a material adverse change occurs. Where an acquiring company uses its own shares as part of the consideration paid to acquire another company, or in a merger of two companies, the contract may provide that either party to the transaction can cancel it if a material adverse change significantly reduces the value of the other party.