Dealmaking

Dealmaking is defined as the art of crafting deals through negotiations focused on an integrative, or value-creating process, rather than through distributive bargaining, or a haggling process. Dealmaking includes the range of activities both at the bargaining table and away from it that seek to bring two or more parties together toward some common end, whether it is the sale of an asset, a vendor agreement, or a merger between corporations. The Program on Negotiation emphasizes integrative bargaining in its dealmaking literature and teaches methods and techniques from this school of thought in its executive education courses.

In corporate dealmaking, much of the action happens away from the negotiating table. Successful dealmakers understand that deal set-up and design greatly influence negotiation outcomes and successfully closing a deal. Other critical factors in successfully making deals include strategic behavior – the unwillingness of one or both sides to make a best offer – psychological factors, lack of a deadline, poorly-prepared formal documents and refusal to allow the other side to make a graceful exit, even when they’ve agreed to your demands.

Strategies for successful dealmaking include tactics such as creating more value by exploring hidden interests and adding issues that appeal to your bargaining opponent. Another tactic is recruiting a third party mediator when the dealmaking process is at an impasse. Sometimes, Harvard experts find, it pays to be the first person to make an offer, while at other times, it pays to wait.

Articles from the Program on Negotiation focus on a vast array of dealmaking strategies, and explore the latest concepts such as expanding the pie, “negotiauctions,” anchors in negotiation and bartering.

Emotional intelligence brings mixed results

PON Staff   •  04/15/2014   •  Filed in Dealmaking

As you sit down to negotiate with a new colleague over a long-term project being managed by your divisions, you feel a bit nervous. Steve, though, immediately puts you at ease. He is warm and friendly, undaunted by the challenging task confronting you. As you begin your discussion, Steve makes it clear that he is … Read More 

In College Athletics, Dealmaking Could Be a Win-Win

Katie Shonk   •  04/14/2014   •  Filed in Dealmaking

A recent ruling by a regional branch of the National Labor Relations Board (NLRB) raises the question of whether college football and basketball players will engage in the kind of collective dealmaking with university administrations that is found in business and government.

In March, the NLRB in Chicago sided in favor of a group called the … Read More 

Top Ten Business Deals of 2013: Yahoo buys Tumblr

PON Staff   •  01/14/2014   •  Filed in Dealmaking

When you know little about the asset at stake or the context, it makes sense to hire experts to do your negotiating for you—as long as you carefully monitor their work, align their financial incentives as closely as possible with your interests, and question their advice. … Read More 

Top Ten Business Deals of 2013: Office Depot – Office Max

PON Staff   •  01/14/2014   •  Filed in Dealmaking

Office Depot’s $976 million, all-stock acquisition of OfficeMax, announced on February 20 and completed on November 5, was widely praised as an important step toward consolidating the office-supply industry, which has suffered from a glut of stores amidst competition from online retailers and declining demand for paper and ink. … Read More 

Top Ten Business Deals of 2013: The “Burgers and Ketchup” Acquisition

PON Staff   •  01/14/2014   •  Filed in Dealmaking

On February 14, 2013, the news broke that Berkshire Hathaway, the conglomerate run by Warren Buffett, was planning to purchase H.J. Heinz—and its iconic Heinz ketchup—for $23 billion. Joining Berkshire Hathaway in the acquisition was 3G Capital Management, a Brazilian-backed investment firm that owns a majority stake in Burger King. As such, the deal marked … Read More