Lessons Learned From Deals That Failed; Experts Discuss

Transactions and corporate deals are an important benchmark to understand business environment. However, the deals that do not conclude also need examination and thorough review.

Discussing the issue at the first ever India-US Legal Services Summit organised by Indo American Chamber of Commerce, Jaipat Singh Jain, Partner, Lazare Potter Giacovas & Moyle LLP said, "I might be lying if I see all my deals were successful. Fundamental questions which we grapple with is what would you call a deal that has failed."

Anil Kasturi, Partner, AZB & Partners, commented that, "In M&A, the connotation is very different. One could say it is successful but if one of the parties is not happy, then it would be a failure. There could be a transaction, wherein the parties find that there is immense gap in the expectations and the transaction does not conclude. To me that's also successful. For me, that's a win."

Amit Aggarwal, Senior Partner & Head of Corporate Practice, SNG & Partners said, "Reasons for failure could be attributed to different things. It would be wiser to lose the deal rather than concluding a joint venture which makes the parties unhappy later."

Jaipat Singh Jain highlighted that there were only 5 per cent of deals which did not close after signing.

"People may renegotiate price, restructure it but they (95 per cent) eventually ended up closing. My own experience is that no deal which was signed, was not closed. The fact that I got paid could be a good yardstick. But did the client win in the process, I'm not so sure. That's my take on it," Jain added.

Abhishek Kale, Deputy Managing Partner, Naik Naik & Co said that it was never easy to prepare all the time. There are commercial changes.

"The role of the investment banker is also crucial. The role not only depends on the valuation. They also discuss the contractual provisions. As lawyers we have to ensure that somewhere the lines are drawn," Kale said.