Mergers and Acquisitions – ESAN International Week 2024 Prof.

Rottig

Exercise M&A Negotiation

An analogy I have repeatedly used in our class sessions is that buying a company is similar to buying a
house. A common saying in real estate investing is, “You make your money when you buy, not when you
sell.”, and this motto equally applies to acquisitions as one of the key factors of acquisition success is the
purchase price an acquirer can negotiate.

Successful price negotiation is a key component of the closing period in acquisitions and relies on (a) in-
dept and thorough due diligence to gain a sufficient amount of data and information for target
valuation, (b) proper target valuation from the perspective of a specific buyer (i.e. target value including
the synergic value for a specific buyer), and (c) effective negotiation skills in order to be able to
“bargain” for the lowest price. This exercise is about the latter, effective negotiation skills.

One of the world’s most preeminent practitioners and professors of negotiation skills is Chris Voss, who
negotiated domestic and international hostage situations for the FBI for fifteen years. Based on his FBI
negotiation skills and experience, Chris Voss provides training and advice to Fortune 500 companies and
he has lectured at leading universities including Harvard, MIT, Northwestern, Georgetown and the
University of Southern California.

Task: Watch the following video by Chris Voss (https://www.youtube.com/watch?v=_UaH98O7ku8). If

you have the time, you may also read (or take a glance at) Chris Voss’ book titled “Never Split the
Difference: Negotiating as if Your Life Depended on it”, which serves as the basis for the video.

Questions:

1. Briefly discuss the 3 key negotiation skills that you have learned from the video (and perhaps
from reading the book, if you had the time). Describe each of these 3 key negotiation skills in a
separate paragraph and use a brief example or anecdote that Chris Voss mentioned in the video (or
book) to illustrate each skill.

2. Apply each of the 3 key negotiation skills from question #1 by discussing how each skill would help
you become a better and more effective negotiator when acquiring a company. Describe each of
these 3 key negotiation skills in the context of acquisitions in a separate paragraph and discuss what
specific negotiation tactics/strategies you would use when negotiating the acquisition price with
your counterparts from the target company.

Submission Instructions and Due Date:

Submit your answers to both questions in a Word file via e-mail to drottig@esan.edu.pe by Sunday,
January 28. Your answers should comprise about two pages, typed, single-line spaced and use Times
New Roman 12-pitch font with a 1-inch margin all around. Clearly mention Question 1 and Question 2 to
indicate which answer belongs to which question. Make sure to add your name, course name and date
in the header.