Negotiation cannot be learned.
While some individuals are naturally more at ease, formal negotiation techniques do exist. Setting clear objectives, understanding the counterparty's expectations, and thoroughly analyzing the deal materials are all critical factors that can make the difference. Excellent preparation is very often decisive.
You must hold your cards close to your chest.
Some believe cunning is required to reach a good agreement. Without being naive, building a climate of trust is essential to obtaining concessions from the counterparty. Bluffing is a risky strategy because it is an all-or-nothing game; if exposed, the party loses all credibility.
Negotiation inherently results in a winner and a loser.
This traditional view assumes parties negotiate against each other—simply splitting the pie and striving for the largest slice. In many cases, however, it is possible to expand the pie creatively by introducing new elements into the negotiation beyond those initially on the table. In M&A transactions, discussions typically focus on valuation. To avoid deadlocks, negotiations can be enriched by addressing transition support, representations and warranties (R&W), or payment terms. For instance, an earn-out (a variable price component tied to future performance) can often resolve a valuation impasse.
A hard-fought negotiation can leave lasting scars. A buyer who negotiates too aggressively may secure a favorable price, but risks fracturing the relationship. This can prove detrimental post-closing if the former owner continues to hold influence within the business. It is sometimes wiser to pay a higher price and secure the seller's goodwill, which will pay dividends during the transition.
You should negotiate directly with the counterparty, without intermediaries.
While personal involvement is essential, guidance from a neutral third party can be highly beneficial. M&A advisory firms can step in to reassure or apply pressure at the right moments to secure the desired agreement. Success-fee remuneration structures align the advisor's interests directly with those of the client. Furthermore, these advisory fees are exempt from VAT (VAT Code Art. 44 § 3 c10), which is particularly advantageous for individual sellers.
In negotiation, the stronger party always wins.
It remains to be seen who is truly "stronger." The party that appears weaker on the surface is often the most determined. Mindset is paramount in negotiation. As John F. Kennedy famously noted: "Let us never negotiate out of fear, but let us never fear to negotiate."
More often than not, our perceptions of what the counterparty wants do not match reality. Open dialogue and active listening are key to understanding the other side's expectations and forging a mutually beneficial deal.
That being said, negotiating from a position of strength is unquestionably an advantage. So how do you strengthen your hand? Having a credible alternative—a BATNA (Best Alternative to a Negotiated Agreement)—and communicating it skillfully prevents you from being dragged down in price concessions. In principle, this alternative represents your walk-away point. If you successfully convey to your counterpart that you hold a strong BATNA, they will adjust their strategy accordingly, as you have established a clear anchor.
Seeking to "win" at all costs or always having the last word is rarely a sound strategy. Conversely, explaining your perspective and rationale, objectifying your offer, and seeking a fair balance between each party's objectives will far more reliably yield an agreement that paves the way for a successful new chapter.
Negotiate with strength, indeed—but always with respect. Bluffing is a risky strategy because whoever uses it plays an all-or-nothing game.
