Term · Governance & Shareholder Structure
Change-of-control clause
In briefA change-of-control clause grants counterparties special rights upon a change of control, for example to call loans, demand special payments or adjust management contracts. For small caps it can cap takeover premiums or increase refinancing risks upon a change of control.
Definition
A contractual clause that triggers rights upon a change of control, for example the termination of loans, special payments or adjustments in management contracts.
How it is calculated
Formula. No standard value; examination of the contractual consequences when defined control thresholds are exceeded.
Why it matters for small caps
In the small-cap segment, such clauses can cap takeover premiums or increase refinancing risks upon a change of control.
Common misreadings
- It is viewed only as an M&A detail; it can also affect operational contracts and credit lines.
In the process
Frequently asked
What is a change-of-control clause?
It is a contractual provision that takes effect when control over a company changes. It can tie loans, contracts or payments to new conditions.
How do you examine such a clause?
You analyze what consequences are triggered when defined control thresholds are exceeded. The specific contractual consequences are decisive.
Why is the clause more than an M&A detail?
It is often seen only in the takeover context, but it can also affect operational contracts and credit lines. Its effect thus extends beyond pure mergers.
Related terms
Sources
Primary
Regierungskommission – Deutscher Corporate Governance Kodex
https://www.dcgk.de/de/kodex.html
https://www.dcgk.de/de/kodex.html
Methodology
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.