Negotiating a successful merger and acquisition (M&A) deal is hard work, even when everything is going to plan. And when negotiations start to go off track, it can seem impossible to fix the situation. How do you make an M&A negotiation start going your way again?
When everything (and everyone) is at a standstill, here are 3 things you can do when an M&A negotiation isn’t going your way.
1. Remember Your M&A Goals
Why did you want your business to get involved in an M&A in the first place? There are plenty of good reasons to do an M&A deal. Are you trying to expand quickly? Have better control of your supply chain? Whatever the reasons, they should always be on your mind when you’re negotiating an M&A for your business.
When you come to the negotiating table focused on your M&A goals, it can easily help revive a stalled deal. For instance, if the other company doesn’t understand why you’re not being flexible on an issue, you’ll be able to clearly explain the problem in terms of your M&A goals. Chances are that the other person will understand and either be willing to side with you or offer an alternative that works for both of you.
Remembering your M&A goals can also help you keep things in perspective. Are you refusing to go along with something because it really goes against your M&A goals? If not, then what’s the real issue here? If you can’t find a good reason why you won’t be flexible, then chances are that you’re letting pride and personal bias get in the way of your M&A. Don’t let them.
As always, proper goal setting, along with constantly measuring your progress towards your goals, will help you and your company make the best M&A choices.
2. Understand the Other Point of View
If you find that the other company isn’t budging on an issue, take a moment to think about the situation from their point of view. Why did they want to start an M&A, and is there anything about the issue that’s going against the other company’s goals?
When you understand what’s going on in the mind of the other potential M&A partner, you’ll be much better prepared to offer a compromise that works for both of you — and move forward with the M&A negotiations.
Another advantage is that empathy and understanding help build trust between M&A partners. And keep in mind that your relationship with your M&A partner will last far beyond the negotiation phase. Building a solid relationship early on is a key driver for successful M&As.
3. Walk Away if Your M&A Just Won’t Work
After all those weeks — or even months — of planning, meetings, legal fees, due diligence, and more meetings, the last thing you want to do is abandon the M&A deal. But while we agree this should be a last resort, you should always be ready to walk away from the negotiating table for two important reasons.
First, if your negotiating partner senses that you’re too invested in the deal to back out, they’re more likely to take advantage of the situation and move the deal in their favor, knowing that you’re more interested in closing the M&A deal than fighting for a fair share. Avoid this by making it clear that you’re willing to walk away if needed and that you’re always looking for new potential partners in case this M&A falls through.
The second reason is that walking away from the negotiating table could very well be in the best interests of your business. A few minutes of awkward conversations today are much better than resenting a bad M&A for years to come.
Walking away from a deal can be hard, especially if you’re feeling pressure from the other company to keep moving forward. But think of it this way: if you know that a deal isn’t in the best interests of your business, every minute that you spend working on the deal is a minute you could be spending looking for an M&A partner that’s a better fit.
Take Time to Negotiate Well For a Successful M&A
When you’re in the middle of an M&A negotiation, even small disagreements can seem like impossible hurdles. But if you stick to your goals and communicate well, your M&A will help your business thrive in the future. At Confie, we put people and culture first when working with M&A partners. Interested in selling your insurance agency? Get in touch with us today to learn more, or give us a call at (714) 252-2500.
