Problem 1: Unreasonable Preconditions
- Example:
- The CEO of the acquired firm insists there will be no merger unless you guarantee he’ll be able to run the combined firms.
- Risk:
- If the demand is real and not a bluff, you don’t have a deal.
- Avoidance Plan:
- Make it clear at the beginning of the negotiation that everything must be on the table if there’s going to be an eventual deal.
Problem 2: Strategic Leaks
- Example:
- While you’re still negotiating price, an article appears in the trade press quoting a “knowledgeable source” that the final deal will be in the high end of the negotiating range.
- Risk:
- Destroys trust on both sides.
- Avoidance plan:
- Insist that the negotiating teams be as small as possible. Point out, prior to negotiating, that untimely leaks may scuttle the entire discussion.
Problem 3: Delay Tactics
- Example:
- Key people from the seller’s negotiating team are unavailable when you want to have a substantive meeting.
- Risk:
- The seller’s company could be slowing the process down purposefully, perhaps seeking to generate another bid.
- Avoidance plan:
- Start the negotiation with an explicit timetable agreed to by both parties.
Problem 4: Musical Chairs
- Example:
- The people on the other negotiation team change from meeting to meeting.
- Risk:
- New faces can easily result in reneging of previously agreed-upon issues.
- Avoidance Plan:
- Obtain a commitment prior to the first meeting that the same players will be involved on both sides.








