We provide an offline version of this dictionary and you can download it free now.
Home » Breakup Fee

Definition Of Breakup Fee:


A common fee used in takeover agreementsifthe seller backs out of a deal to sell to the purchaser.
A breakup fee, or termination fee, is required to compensate the prospective purchaser forthetime and resources used to facilitate the deal. Breakup fees arenormally 1-3% of the deal's value.A companymightpay a breakup fee if itdecides not to sell to the original purchaser and instead sells to a competing bidder with a more attractive offer. Sometimes a breakup fee can discourage other companies from bidding on the company because they would have to bid a price that covers the breakup fee.

Browse Law Terms By First Letter:

Home | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | Y | Z |