Having worked on hundreds of merger and acquisition deals over the last few decades, I’ve found two things to be true: 1) Each deal is unique in its own way; 2) There are a few mistakes CEOs often make that complicate deals and harm their own self-interest.
Allow me to outline five actions CEOs approaching a merger, acquisition, sale or joint venture should take to avoid those mistakes:
1. Tread lightly. The reason many companies are positioned to be acquired or bring on a strategic partner is because of a CEO’s aggressiveness. You may recognize yourself in this description. Your take-charge attitude secured market share and generated venture capital and growing revenues, and now your company is hot. But it rarely pays to bully your way through an M&A negotiation. The person on the other side of the table is likely just as savvy as you, and might be more experienced at closing deals. If you have leverage, it’s fine to use it, but be careful not to burn bridges in the process. Karma is real.
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