During an M&A negotiation, both parties will likely experience a range of emotions. The way you control those emotions have a profound impact on the progress and outcome of the deal. Hold-ups might occur, term renegotiations might cause unwanted stress and fatigue, or your valuation expectations might turn out to be unrealistic
To gain a greater sense of how you can control emotions during an M&A negotiation, keep the following techniques in mind.
You know yourself better than anyone. If you feel yourself entering an emotional state, take a break from communication and engage in an activity that calms you. Catching yourself before you enter a negative state can prevent you from damaging your reputation or causing irrevocable harm to the transaction itself.
If there's a specific situation causing you stress, take time away so that you can return with a more objective outlook on the issue. Often times, our emotions prevent use from reaching logical conclusions.
Not everything is going to go as planned during a transaction. It might be that the other party is being uncooperative, or that documents just aren't being received in a timely fashion throughout the due diligence process. It might seem advantageous to become more aggressive in your communication efforts. However, it's important to exert positivity in your interactions. If you can demonstrate an optimistic attitude throughout the M&A negotiation process, you're more likely to reach an acceptable outcome
You should never send an email when emotions have the best of you. Instead, opt for more personal communication methods when expressing concern or dissatisfaction.
It's tempting to delegate blame to a colleague or the other party when the specificities of an M&A negotiation don't go according to plan. Transactions are living, breathing processes, and it's crucial to keep in mind that small road bumps are inevitable. The worst reaction you can have to such a blunder is to remove yourself from the situation.
While an error might not have occurred due to your actions, or even under your watch, taking an active participation in remediating the problem will demonstrate your willingness to reach a mutually beneficial outcome. Bring your best self to the table by preparing systematically for your negotiations so you can manage your team with confidence and composure.
It might be tempting to reach for that first offer when it's presented to you. Our emotions have a tendency to account for the benefits and immediately jump to conclusion. However, you must evaluate whether the offer meets your pre-determined criteria. Most times, it's better to have multiple offers to choose from. Similarly, knowing your position and leverage within the transaction process can allow you to thoroughly understand your hand at play.
Don't let your emotions guide your decision to choosing the right offer. Whether you're merging or acquiring during an M&A negotiation, emotions can make or break the deal.
Understand Your Limitations
Pride can often be our chief enemy when it comes to being effective in the workplace. It's implausible and counter-intuitive to attempt to complete a transaction without other minds on your team. Proactive work leaders understand that the colleagues and advisors at hand can create a better solution together than they could alone. Allow your team of attorneys, bankers, and accountants to collaborate and use their combined expertise to reach an ideal outcome.
The M&A negotiation process can be overwhelming, but more often than not, extremely rewarding. Implement these techniques during your next transaction and you'll be surprised at how effective your communication, decision-making skills and deal closure outcome might be.