Potential dealbreakers are often described in contracts as material adverse events. But Boeing and Embraer wrote out a laundry list in the contract signed in January 2019, which Reuters reviewed, of 10 conditions that would not qualify as the kind of material adverse events that could be a pretext for cancelling the deal. A pandemic and any changes to the global economy were among them.
But the contract banned Boeing from walking away due to “any change in the market price” of Embraer shares. Other conditions that would not allow Boeing to walk away included if Embraer’s credit ratings were downgraded or if it failed to meet its own revenue or earnings forecasts.