A mediator can play an important role in the sale of a company. For this reason, the term “deal mediation” has become established among M&A boutiques and consultancies in recent years. The background is the use of mediation for the purpose of a sustainable transaction. This article deals with the possible areas of application of a mediator in the transaction process.
Classic use
The mediator can, in the context of Corporate transactions can be used in two ways. On the one hand, such a moderator can be used in the classic way, i.e. in the sense of the mediation process. This means that a conflict has already arisen between the parties involved in the M&A process. The parties do not necessarily have to be just the buyer and the seller. Conflicts regularly arise between M&A advisors, such as M&A process managers, tax advisors, auditors, lawyers and clients or even among themselves.
Preventive use
On the other hand, the mediator can also be used preventively. This is particularly useful in the case of company acquisitions and sales.
Who is the client?
In this context, one of the key questions in the use of a mediator aims at how and by whom the mediator is involved in the process. For the mediator, the assignment can be a clever one, such as in intra-company mediations.
M&A boutiques and consultancies
This always comes into consideration when the M&A boutique commissioned with the sale or purchase, as smaller M&A advisory firms are often called, or the commissioned advisor wants to secure the transaction execution. The mediator is therefore appointed by the M&A litigant. It is therefore a kind of ‘clever case’.
Buyer and seller
Do the two main parties, buyer and seller, have a common understanding of the Company succession mediation and see the conflict in which they find themselves as part of an M&A process as an opportunity to conclude a purchase agreement, the mediator can be commissioned directly by these two parties.
Part of the transaction process
The third option is to have the mediator scheduled and priced in from the beginning of the process by the M&A consultancy firm or the M&A advisor commissioned to carry out the transaction. This can be done preventively or on call. In this case, buyers and sellers know the possibilities for using a mediator from the beginning of the process and can include the mediator in their schedule.
Requirements for the mediator
The demands on a mediator depend on the situation (the case) and the parties involved. In addition, there are different requirements for the mediator depending on the conflict topic. This may, for example, be due to a certain sector or necessary expertise. However, there are a few requirements that a mediator must basically fulfil in order to be able to conduct a mediation successfully. Mediation cannot only be described as successful if the parties to the conflict reach an agreement. Rather, the definition of a successful mediation depends on the attitude of the mediator. Thus, a mediator may well be considered to have conducted a successful mediation if he or she has succeeded in leading the process and thus has process sovereignty in the mediation.
The Mediation Act
The Mediation Act stipulates a few requirements of a fundamental nature. It states directly in §1 (2) that “a mediator is an independent and neutral person without decision-making authority who guides the parties through mediation”. The first requirements for a mediator are derived from this. The mediator must be impartial and must be able to lead the process. Furthermore, §2 para. 3 MediationsG states that “he or she shall promote communication between the parties…”. Well-developed communicative skills are therefore a further requirement of the Mediation Act.
The Mediation Act also ensures that a mediator must have undergone appropriate training and also receive regular further training in this area.
Other skills
Away from the mediation law, mediators join the ranks of counsellors and trainers, who should demonstrate competences in the areas of personality, professional and field competences as quality requirements.
The professional competence is imparted through the training already prescribed in the Mediation Act and is often enriched with knowledge from communication, moderation and psychology. The professional and field competences are analysed in detail in the following section.
The decisive and fundamental requirement for a mediator is not only trained technique, but above all attitude. Mediators should therefore not be exclusively theoreticians, but rather have practical and life experience so that they are perceived by the mediators as respected authorities. Soft skills such as patience, humour, empathy, authenticity and creativity are also required.
In the next article, we will take a closer look at the special requirements of a mediator in corporate transactions.
Tips for further reading:
Areas of conflict in the sale of a company
Comment: Unresolved company successions endanger our prosperity
Advice traps in the process of business succession
Selling a business: Why a pure success fee makes it difficult to provide serious advice
Selling a company in the IT industry
The 5 most important contents of an entrepreneurial emergency kit
