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Freshfields advises WEX Inc in landmark Material Adverse Effect (MAE) litigation arising from COVID-19

Freshfields Bruckhaus Deringer LLP (‘Freshfields’) has advised WEX Inc during the course of its High Court litigation with Travelport Limited and others in relation to WEX’s acquisition of eNett International (Jersey) Limited (‘eNett’) and Optal Limited (‘Optal), which has resulted in the acquisition being completed at a significantly reduced purchase price.
On 24 January 2020, WEX entered into a share purchase agreement to acquire eNett and Optal for US$1.7bn. On 4 May 2020, WEX announced that it was not required to complete the acquisition as a result of a Material Adverse Effect (MAE) having occurred due to the impact of the COVID-19 pandemic on eNett and Optal.
During 21 to 29 September 2020, the High Court heard a trial of preliminary issues concerning the proper interpretation and application of the MAE clause, in which it ruled in favour of WEX in a judgment handed down on 12 October 2020.
Subsequently, on 15 December 2020, WEX and the Sellers agreed to complete the acquisition for a revised purchase price of US$577.5m, reduced from the US$1.7bn originally agreed.
As a result, the litigation is now settled and the proceedings have been dismissed. 
Matthew Bruce, Partner, Freshfields Bruckhaus Deringer, commented that: “This was a landmark case - the first of its kind - on the interpretation of a MAE clause in the context of a share purchase agreement, and was the first to arise from the Covid-19 pandemic. The settlement reached between the parties has resulted in WEX completing the acquisition at a significantly reduced purchase price.  We are delighted to have advised WEX throughout the litigation and to have helped achieve this result.”
The partners advising WEX throughout the litigation and in relation to completing the acquisition on revised terms were Matthew Bruce and Ali Kirby-Harris.