From the course: Mergers & Acquisitions
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Define other deal terms
From the course: Mergers & Acquisitions
Define other deal terms
- In any acquisition, there are many terms beyond the basic price that you'll need to negotiate. This can include things like severance packages for employees who get laid off as a result of the deal, stock or other incentives for employees who stayed with the acquired company, retention bonuses, limits on competitive activities, and other terms that can affect the acquired company's performance going forward. These terms are often negotiated to protect the buyer's future interests. For severance packages, you'll need to answer who gets paid, how much. That seller is probably going to want to protect their people who are going to remain with the combined entity. You may have incentives and retention bonuses for people to stay on. You want to keep key personnel. Make signing a retention agreement a condition of the deal. You can even use holdbacks to enforce those conditions. But be careful. These types of deals can backfire on you. I know one company that gave an incentive for one key…
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