8. Selection of Target and Negotiation Process
The previous chapter discussed the selection and scanning process for candidates to acquire. This chapter covers some of the key issues related to negotiation, the choice of the partner, and the evaluation of the contribution that each partner can make to the combined venture.
In the negotiation for a merger or acquisition, the acquirer makes deals with the divesting party. Such deal-making can include intense price negotiations, in which the acquirer might pay a premium for the acquired party. There is also the issue of information asymmetry between the divesting party and the acquirer, which means that the acquirer negotiates from an inferior position in terms of knowledge on the target. Consequently, ...
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