The art of getting the deal done

Regulatory uncertainty is now a deal term

Regulatory scrutiny has intensified across FDI, the EU Foreign Subsidies Regulation and merger control regimes, particularly in sectors viewed as strategically significant. This scrutiny has reshaped not just timetables but also core deal terms. In many jurisdictions, regulatory processes are marked as a key execution risk and have moved from being a post-signing formality to a central negotiation point that shapes conditionality, long-stop dates, termination rights and break fees.

Buyers often push for broader walkaway options if regulatory inquiries deepen, while sellers resist by tightening definitions around regulatory impediments and securing more robust mitigation obligations. Voluntary filings – once unusual – have become normalised in geopolitically sensitive sectors, adding another dimension to negotiations.

Reverse due diligence on a bidder is now considered critical for a seller to assess the risk that a deal could be scuppered or prolonged. In competitive processes, requiring a bidder to submit FDI applications on a confidential basis (and pay the sometimes substantive fees, depending on jurisdiction) before they are selected as the preferred bidder is also increasingly becoming the norm.

Addressing the valuation gap problem 

Valuation misalignment was a defining feature of 2025 deals. Buyers and sellers frequently entered negotiations with fundamentally different views on performance trajectories, sector recovery paths and macroeconomic resilience. Many transactions that reached signing did so because parties moved away from fixed numbers and treated valuation as a dynamic structuring matter where upside and downside are to be shared in light of the future performance of the business acquired.

Earn-outs became narrower and easier to measure, often featuring key-person retention mandates. Rollover equity keeps both sides structurally aligned on future value, and deferred consideration and vendor financing provide practical solutions to reconcile timing, liquidity and risk allocation concerns. The related tax complexity requires thoughtful consideration to mitigate unintended value loss. One-way or capped adjustments protect buyers from downside exposure while still getting sellers close to their target price, and targeted true-ups avoid sprawling debates over broad working-capital ranges. Here, creativity is essential. 

Controlling the narrative remains a seller’s best advantage

With deeper diligence and buyers more sceptical, sellers who shaped their narrative early enjoyed the greatest success. They approached known issues with transparency, socialised preferred structures sooner and ensured management delivered consistent messaging across jurisdictions. Workshops, site visits and live demonstrations became powerful storytelling moments, giving sellers the chance to show operational strength and culture in ways that data alone could not. A well-managed process not only accelerates diligence but also reduces the surprises that tend to widen valuation gaps.

Post-signing is no longer cruise control

Uncertainty in the market – whether that be regulatory or macroeconomic uncertainty – has meant that the period between signing and completion has become riskier, especially when coupled with the prolonged post-signing periods due to regulatory approvals.

Dealmakers are now focusing more sharply on mitigating execution risk in the post-signing period, with tighter controls being placed on buyer conduct that may derail a deal. Buyer termination rights such as material adverse change clauses will come under greater scrutiny and dealmakers will have to find the sweet spot of giving buyers some level of protection for unexpected pre-completion events without allowing the MAC to be used to cure buyer’s remorse.

Looking ahead to 2026: Creativity and collaboration will rule

Uncertainty will continue into 2026, but dealmakers across regions are cautiously optimistic. Creative structuring will remain essential, regulatory strategy will be engineered earlier, and diligence will stay front-loaded. More bilateral processes are expected, with trust and transparency replacing auction-driven speed.

In 2025, the art of making deals work became a pre-signing discipline – and in 2026, those who master it will be best positioned to convert interest into execution.