Top eight insights from my buy-side M&A negotiation practice

In a recent call, Florian Bauer asked me to prepare a short video training for his students with some insights from my buy-side M&A negotiation practice. He is a professor at Lancaster University, ranked #1 in the world in MBA for Corporate Strategy by the Financial Times.

Over the past 15 years, I have evaluated several hundred potential M&A opportunities and accompanied some of them in the negotiations, mostly from the corporate buyer perspective.

Lesson Learned #1: The larger the transaction, the more professional and similar the negotiation concept. Focus on the collaborative and fair negotiation style where both parties share the same values. The Harvard concept is very common in the M&A context - create win-win situations based on interests rather than positions.

Lesson Learned #2: Take enough time to prepare yourself with sufficient people and data research and consistent due diligence results. Try to find out the interests of the other party. Negotiation is basically very easy if you understand and actively listen to the people you are dealing with.

Lesson Learned #3: Avoid M&A Fever - Develop and evaluate realistic and strong alternatives (BATNA). The biggest mistake the unexperienced make is to get stuck in M&A fever - falling in love with the target company.

Lesson Learned #4: Take the Lead in Negotiations and Play Fair. Your proposal should always be fair and balanced and anticipate the interests of the other party.

Lesson Learned #5: Strictly manage communication channels throughout the M&A process and document everything.

Lesson Learned #6: Bring Deal Breakers to the Table Early and Start with the Big Picture.

Lesson Learned #7: Bring your issues and concessions forward strategically. Don't bid against yourself, and don't just focus on prices, but on other terms as well.

Lesson Learned #8: Use independent experts and maintain your network of trusted advisors.