Special aspects of negotiating with German medium-sized businesses for investors from the Czech Republic

last updated on 22 February 2022 | Reading time: approx. 2 minutes

What special issues await Czech companies when they take over or acquire a stake in an owner-managed company in Germany?

Czech companies are usually relatively hierarchically organised, thus decision-making competencies are clearly regulated. But this also has the effect that the respective responsibility on lower or middle management levels has been restricted to providing the information relevant to decision-making. But there is not always an unambiguously clear understanding regarding the question whether the higher management is obliged to ask for information or whether it is the obligation of the information carrier on lower or middle management level to deliver such information. 

At the beginning of the collaboration, this can cause some difficulties settling in, especially in owner-managed companies from the German SME sector, because the owner often already trusts long-time employees, even on middle or lower management levels, which can be reflected in their relatively broad decision-making competences.

What aspects should Czech companies take into account when negotiating with German medium-sized businesses?

Negotiations between Czech entrepreneurs are often accompanied by behaviours or conversation topics that are not directly linked to the transaction itself. If possible, a direct, perhaps even confrontational discussion of differing views is avoided and the parties attempt to negotiate contentious issues in the context of other issues so as to reach a complex compromise solution. 

This tendency to combine different problem areas can, however, cause that issues which seemed to have already been settled between the parties are raised again at a later stage in order to be solved together in the broader context when discussing the final transaction parameters. 

Structured negotiations, where individual points are addressed one by one in order to finally resolve them can make the Czech partners feel backed into a corner. 

In this case, an open and transparent negotiation atmosphere where neither party reacts emotionally to the possibly different approach of the other party, but communicates its positions in an understanding but also unambiguous manner can help successfully close the deal.