Overcoming Barriers to Win-Win – Smoothing the deal process

Virtual Round Table Series M&A Working Group 2018

What are some of the negotiation approaches that are most likely to achieve a deal in your jurisdiction?

Germans like honesty, we are very direct. Last week, I had a negotiation with a US firm and nobody would give their real opinion. Everybody was beating around the bush, and I was the only one willing to give my opinion. Everyone was taken aback at first, but then we had it on the table and the Americans felt free to express their views as well.

Germany is also a formal, patrimonial society and we like to know who is leading the negotiations. If someone has a title such as doctor, then you should use it.

This is very different from The Netherlands, where everybody talks and contributes to a position. In Germany, it is expected that the leader has the solution.

 

What are some of the negotiation approaches least likely to achieve mutually satisfactory resolution of a deal obstacle in your jurisdiction?

Even in Western Europe, the cultures are very different in my opinion. The French are so totally different than Germans. We had a client from France who was buying a German company. They should have signed the deal at the end of July, but when it was delayed to the beginning of August, the big French law firm said they couldn’t negotiate in August, because they were all on holiday.

If I said that in Germany or the US, they would think it was a joke. The law firm called me on September 1st and said they were ok to continue, but there was no signing because we lost momentum from the deal.

I would never have left the table for holidays in that situation, I would have skipped my holidays for the deal.

 

Which techniques are typically used by international counterparties in your jurisdiction to overcome what appears to be an insurmountable obstacle? 

If I feel there is a difficult situation, I like to use humour. When you use humour correctly, most people relax, the problem is that humour around the world is often different.

If you can create a more relaxed situation, then it is easier to continue negotiations, we are all human beings and we want to be happy people.

I was once negotiating for a start-up and we broke off to play table soccer. Afterwards it was much easier to go back to the negotiations and even the hard parts didn’t feel as problematic as they did before the break.

 

Please recount a “war story” in your experience of a negotiation approach that went spectacularly well and explain how/why it worked.

I once represented a small German company when a French company was in the process of buying it. The owner’s daughter died suddenly of a heart attack during the negotiations and the two attorneys on either side held the deal together. Negotiations were conducted in a polite and respectful way following the death, and we signed the contract. One year later, the French corporation called me to see if I would represent them. They liked the way hard negotiations were conducted in a fair and honest way.

At the end of the day it’s always good if the two negotiators can see the bigger picture and try to bring interests together. Even if they negotiate hard, they need to be fair and honest with each other. Building trust with a negotiator can be helpful when parties get emotional.

 

Please recount a “war story” in your experience of a negotiation approach that went spectacularly badly and explain how/why it failed.

We represented a German firm buying an English business. Two partners flew over to negotiate the deal, and they came back with big smiles saying they had achieved a great price, at only half of the expected figure. What they didn’t understand was English politeness. The English negotiators never said no, but they called me before my partners landed to say the deal was off. I had to break the news when they arrived back in Germany.