Successful M&A; deals don’t just happen by accident. Each M&A; transaction has its own complexities and numerous factors must converge to result in a mutually beneficial outcome for both the buyer and seller. Sellers who are willing to critically analyze a deal objectively and possess the gravitas to have tough conversations with buyers stand the best chance of obtaining an optimal outcome for themselves and avoiding some common seller “deal traps” outlined below.

5 Mistakes Sellers Make During The M&A; Deal

Mistakenly presuming they have a deal. Many sellers, after getting a high-level, non-binding commitment from a buyer at the right valuation or purchase price may think that the core deal has been settled and all that’s needed is a “standard” purchase agreement. But what many people (who don’t do M&A; every day) don’t realize is the cardinal rule that while price matters, deal structure often matters even more.

Many sellers have limited understanding or appreciation of how structure ultimately can significantly affect the price they actually realize in a sale.



In the final analysis, the Seller’s realization is all that really matters.

The starting point for an optimal M&A; deal structure is a robust letter of intent (LOI) that does more than lay out the purchase price and boilerplate provisions. (Read more about LOIs here).

The more general or formulaic the LOI, the more sellers will have to negotiate when it’s time to document the deal (which is anything but standard) at a heightened cost over a prolonged period, and by then, a seller may be too far along to pull back from the deal or negotiate better terms.

As a general deal rule of thumb – buyers benefit from “less” up front and pulling sellers into the process (buyers almost always have more leverage than sellers after the LOI is signed); sellers most typically benefit from “more” up front and should negotiate hard at the LOI stage.

Saavy sellers also need to understand that the process for closing the sale

📌 Mistakes Sellers Make During the M&A Deal Process (India)
🏢 Linden Law Partners
📍 India