The Book of Real-World Negotiations

2Saving a Merger with Creative Thinking

Anonymous contribution

Mergers are a very interesting challenge when it comes to negotiation. Not only do you have to negotiate the terms of the merger itself but, perhaps more importantly, you also have to handle the continual negotiations that transpire as the agreement gets implemented and the new organization takes form. Among the many difficulties that need to be dealt with are differing organizational cultures, position eliminations and recalibrations, and sometimes an imbalance of power between the merging organizations. These are not easy to address and can hamper the new organization for months, and even years, to come.

As the organizations settle into their new reality, they must navigate tricky waters. When doing so, the dividing lines between the previous organizations can last for quite some time until new working relationships form across those traditional lines. In the case that follows, all of the aforementioned dynamics were on display. Fortunately, these challenges were juxtaposed with some creative thinking that saved the new entity from a potentially debilitating conflict.

Background and the Negotiation Challenge

Two companies, called Amity and Branco, had recently agreed to merge. As they were working through some of the issues post the merger, an unexpected twist arose. Amity abruptly changed one of their policies and decided to “tax” each division in a new way that would cost Branco a whopping $25 million. The ...