NEGOTIATING CROSS-BORDER ACQUISITIONS

With the increasing number of mergers and acquisitions, particularly a cross national borders, the importance of knowing how to approach deli cate negotiations has grown. In this case study and interview, James S ebenius traces an Italian copper-products company's negotiations to pr ovide important lessons for anyone involved in cross-border transactio ns. Sebenius interviewed Sergio Ceccuzzi, management board member of K M Europa Metal AG and chairman of its subsidiary, Europa Metalli SpA. Together they discuss the growth of the holding company, SMI (Societa Metallurgica Italiana SpA). In 1965, SMI was one of many small and med ium-sized copper transformation companies in Italy. Over the years, it developed a strategy of growth by acquisition, but only in areas that amplified its line of business. It first acquired Finmeccanica, a sta le-owned competitor, al a time when privatization in Italy was anathem a. Next, through skillful negotiations, it acquired its major French c ompetitor, Trefimetaux, also a state-owned firm. And, in its most diff icult transaction, it overcame formidable obstacles to acquire Kabel-m etal AG, a German competitor. Throughout his conversation with Ceccuzz i, the author indicates specific lessons to be learned from each deal. In summary, he encapsulates the lessons into twelve major points, amo ng them: be willing to wait, sometimes for years, far the right circum stances to culminate the deal; establish good personal relationships; map out the likely players in the deal and assess their interests, not yours; figure out how to deal with potential deal blockers; and, perh aps most important, remember that, even after the deal is done, negoti ation does not stop.