Be a Master M&A Negotiator

On paper, it all seems so perfect: You’ve targeted the ideal company to acquire, the PowerPoint slides are screaming “upside,” you’ve done your financial and legal research, and you’ve given the other company a heads-up that you’re interested in making an offer. (See “Evaluating Potential Mergers” for tips on how to get through those first stages.) Now comes the hard part: the process of closed-door bargaining that leads to the real deal.

While there is no absolute rulebook that governs the incalculable variables involved in merger bargaining, there is a method to this aspect of M&A madness. We interviewed dozens of M&A veterans — from both sides of the table — and distilled some of the best thinking on negotiating into a four-step BNET Crash Course. Best-selling author and merger guru James Freund also shares his 10 rules of bargaining. And, since negotiations rarely go as planned, we’ve identified some common mistakes that can derail good deals, and we explain how to avoid each.

For advice on the first and third stages of a merger, see our previous BNET feature, “Evaluating Potential Mergers," and our follow-up Crash Course, "How to Execute a Merger."