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Mergers & Acquisitions in Singapore: The Do's and Dont's of Negotiations - Part 2

It Is A Sales Meeting So Treat It Like One


As mentioned, ‘people invest in people’. Hence the seller and acquirer would usually start building personal chemistry right from the start with an aim to achieve a commercial fit. The key to making things work in an M&A is mutual respect.


First M&A meetings are then a chance for the acquirer to become familiarised with the seller and the business. So, like meeting an important client, it is important for the seller to be as friendly as possible; be open, positive and confident. Giving firm handshakes and maintaining a strong eye contact help set the tone.


For the seller, it would be a time to make notes and listen to decipher the acquirer’s concerns, objectives, strategy and angles. It is not advisable to rush into the details as this can be done in subsequent meetings. Remember - a deal is never done on the first day.

Don’t Lecture But Listen.

As the business is the seller’s pride, the seller has the natural love to talk about it - sharing the technical details, correcting any perceived misunderstandings and adding new opinions along the way - and then go deeper into the dark rabbit hole of over-excited stream of consciousness.


It is advisable not to give into such natural itch. The key is to know when to speak, and when not to.


As much as the buyer needs to know about the business, the seller also needs to know about the buyer. Hence it is equally important to ask open questions and then give the buyer respect and time to answer. The seller can listen and observe. This may allow the seller a privy to information of the “I’ll see you and raise you” significance, which can then be used for subsequent negotiations.

A Buyer (Typically) Isn’t The Big Bad Wolf

It is a common misconception amongst first-time sellers that buyers are hardball players in negotiations - cold blooded, hyper-critical and ruthless. Hence inexperienced buyers are more manageable and easier to deal with than the seasoned veterans.


This is not true. Acquirers also want to impress the seller as much so the experienced serial acquirers are usually in the sales mode as well - professional and polite. They also believe in the benefits of creating a warm and open atmosphere conducive to negotiations.


So for starters, the acquirer would kick off a meeting with an open and genuine congratulation for the seller - a good handshake and some compliments about the target business.


As this could be a classic tactic of the ‘feedback sandwich’, where the acquirer butters up the seller for rigorous questioning later on, the seller should then remain vigilant and not fall in love too soon.

There Is No ‘I’ In Team

This means the seller has to be treated, as reasonably as possible, dispensable to the business. The seller needs to be seen as irrelevant or inconsequential in the company. Unless, of course, the seller wants to be the long term post sale in the business valuation.

So use ‘we’ to credit the team that helped build and develop the business from scratch. Kick out the ‘I’. This helps the acquirer appreciate the value of the management team and the other key personnel like the controller of the key sales accounts. They may even be inclined to meet the senior staff during subsequent negotiations.


Should the staff be included, then the seller must allow them to speak for themselves and not interrupt at any point. There is less to impress when the seller keeps intervening in the acquirer’s Q&A session with the staff on operational matters to correct the staff’s points and/or elaborate on them.


Hence prior to the M&A meetings, the seller and consultant should have a detailed discussion on all the confidentiality issues of the business, such as the rewards and risks of having certain key staff present during meetings; the concerns of these individuals, and the issues involved in ensuring their behaviour is conducive to the success of the M&A.

Typically, the acquirer would also want to speak directly to the seller as he/she is also part of the team. The consultant is not doing acts of ventriloquism, and hence the seller would need to do as much of the talking. It is then crucial that the seller knows the business inside out - but not to a point of upselling his/her involvement and contributions.

Signals And Hints When Emotions Are At Play

Consultants usually have a hard time controlling an enthusiastic, excitable and passionate seller. It is understandable - he/she actually cares a lot about the target business.

Usually, the seller and consultant would agree on signals or hints as reminders to stay on the path and stick to the plans. Such signs can be as subtle as a pen tap on the table or a codeword, or as obvious as the closing of a notebook or calling for a short break.


Being mindful is also a good way for the seller to steer away from an impending disaster. The body language always tells - breaking eye contact, folded arms, stuttering, crying, shouting, snappy acts, rude responses and short answers - all these are damaging giveaways, which may impede the success of the M&A. So it is always wise for the seller to keep his/her emotions in check and leave the unhelpful ones out of the meetings.

A great business with a background or a moving story, underpinned by analysis, evidence, substantial information and a vision for the future, tends to have a greater capacity for M&A.

However, the hard technicalities of M&A is not everything - the soft ones are as important since buyers are still human, and they do not just buy and invest in a business based on a bunch of numbers or papers, or even its highly informative documents.


So like in a poker game, it is not just about having the right cards in an M&A transaction; it is also about knowing how to play the hand.


Contact us if you would like to have non-obligatory discussion on how we can help you with the negotiation process.


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