Business Sale: General principles of a successful M&A deal

Business Sale: General principles of a successful M&A deal

Despite the crises in the world, the buying and selling of companies continue. The big ones acquire the smaller ones, and then they are also sold, or the small ones buy those who are even smaller and thus increase their potential. This means that any business can face mergers and acquisitions (M&A).

Every deal has its unique challenges, but almost every successful deal has some key principles that reduce the risk of it failing.

M&A deals are like a rollercoaster: their terms and details change many times, the parties often make impossible or excessive demands, and negotiations often reach a dead-end from which there seems to be no way out. So, here are some consistent and logical principles that contribute to the successful closing of a deal.


  1. The principle of building trust

Cases where the buyer chooses the tactics of “bait and deceive” are not rare. Often, an investor announces a high price that they are ultimately not going to pay for an asset.


The buyer wants to start negotiations, get exclusive conditions, and reduce the price after identifying problems during the audit (Due Diligence). This tactic provokes distrust and resistance on the part of the seller, significantly prolongs the period of completion of the transaction, and leads to unnecessary costs for additional documentation. Transaction Advisory Firms in India


If the parties are aimed at a quick and high-quality closing of the transaction, their relations must be developed on the principles of honesty and openness. The first step on this path is the fair price of the asset, which (ideally) will not change during the transaction.


In this case, the buyer needs to conduct a deep audit of the asset, analyze the market, and the position of the partner in the transaction +to initially offer a fair price. And the seller is to carry out the Due Diligence procedure by turning to Transaction Advisory Firms in India which will give a reasoned objective assessment of the current state of the company and its potential.


Another component of trust is the competence of the team organizing the deal. If its professionalism is in question, then the parties will spend a lot of time and effort on reinsurance and double-checking documents, which will certainly entail suspicions and disputes. If you don’t trust the other party, don’t enter into a deal or even start one.

  1. The principle of personal communication

Easy communication is another key to a successful and fast closing of a deal. Our main advice is to communicate! We know from experience that in deals where negotiations are only between advisors, the percentage of failures is higher since the negotiations turn into a broken phone.

One of the important tasks of Transaction Advisory Services in Delhi is not just to give recommendations on negotiations, but also to convince top officials of companies to personally participate in them.

Communication “at the highest level” allows you to timely identify and immediately solve problems that put the deal at risk. In each project, there are three or four “sharp corners” with which it is necessary to work at the negotiation stage.

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