Business deals are a sign of economic transformation. These can be defined as mutual agreement between two parties who want to do business. The deal may be carried out in exchange of goods, services, technology, information or ownership. It is said to be completed only if both the parties abide by the terms of the agreement. 

Let’s find out some of the disadvantages and advantages of Business deals:- 

Advantages of Business Deals:

1. It helps in sharing the resources when they are limited which means more effective and efficient utilization of the resources.
2. It helps firms in placing more focus on key areas after acquired firms to handle non core areas.
3. It helps in better expansion of operations.

Disadvantages of Business Deals:

1. Whenever one or both the parties fails to abide by the terms of the agreement, it leads to wastage of time, resources and money ; such as delay in payments, bad delivery of goods etc. 
2. If the issue escalates further, it may lead to legal complexions, thus again wasting more time and money.
3. Missing out a deal may lead to the company operating less effectively or efficiently in their core business operations. 

How to ensure the success of a business deal-

• Get the top level authorities on the table –  For finalizing an argument, the presence of ultimate decision makers is required. Before starting discussions , be sure that the other party is also interested. Also do some research about the opposite company and the person sitting on behalf of the company whether they have the authority to abide by their commitments or not.

• Stay Prepared and Ready –  Successful negotiators always come with a plan. For a fruitful negotiation, get your self ready with skillful techniques, logical thinking and outcomes of the deal.

• Calculate your risks – Be well aware of the benefits and drawbacks of the proposed deal. Consider the potential risks carefully. Evaluation of risks is also a critical part.
• Keep the records – Prepare proper minutes of the meeting. They can be recorded in a short agreement form of a few pages. This works as a proof of the conversation after a verbal resolution has been reached. Other party can be avoided to disavow on its promises.

Negotiations also consists of building friendly relations with the counterpart. Take your time and understand the culture. Prepare a thorough research about the other party to assess the feasibility of the deal.

Twitter

Twitter claims that they are an open service that is home to a world of diverse people, ideas, information and perspectives.

However, Twitter is an American social networking service. It was founded by Jack Dorsey, Noah Glass, Biz Stone and Evan Williams in 2006, headquartered in the USA. It is known as the “SMS of the Internet“. Currently it has a user base of 330 million.

Elon Musk

Well, most of us are aware about the revolutionary personality Elon Musk. He is the founder CEO and chief engineer at spaceX founder of Tesla. He has been the founder of many famous companies and has served at numerous positions.

The Twitter Musk Deal:

14th April, 2022: Elon musk offer to purchase Twitter for $43 billion. 

Previously, it acquired a 9.1% stake in the company for $2.64 billion to become its largest shareholder. Musk has first accepted to join the Board of Directors of Twitter on being invited by the company, but later denied (allegedly).

23rd April, 2022: Musk stated his offer as “Best and Final”. Reports were coming that twitter is in the final stage of takeover. 

25th April, 2022: The board of directors unanimously accepted Musk’s offer. Musk also issued a statement regarding his plan to introduce new features and services on the platform. 

13th May, 2022: Musk termed the twitter deal as “put on hold”. CEO Parag Agarwal stated that external review of user data was impractical.

Musk asked twitter to prove the required reports.

25th May,2022: A class-action lawsuit filed against Elon Musk alleging that he had violated a set of corporate laws.

8th July, 2022: Musk intended to terminate the agreement and also announced the same. He asserted that Twitter had breached the agreement as it refused to crack down on spambot accounts. He also claimed Twitter of material breach.

12th July, 2022: In response, prosecutors suggested legal action against Musk at the Delaware Court of Chancery demanding Musk to complete the acquisition. 

6th August,2022: Musk gave an open challenge to CEO Parag Agarwal for a Public Debate. The topic of the debate was Spambot accounts. 

29th August, 2022: Musk officially filed a ‘Termination Letter’ for breach of contract.

• Twitter requested the court trial to be held from September 19 to September 22.
• The deal’s original “drop dead” date is October 24.

Conclusion

Twitter officials including CEO wrote that Musk’s appointment as board of director would bring long term value to the company. Lately, the CEO wrote that Musk’s withdrawal from the board was for the best and the company would continue to remain open.

After this story, Musk met with both praises and criticism. Twitter employees were concerned with Musk’s opinions on free speech.

Also Read – ” Why Entrepreneurship Is Valuable To Businesses “

It was predicted that the takeover deal would have resulted in mass exodus of employees. The New York Times alleged that Musk’s intentions were about controlling a megaphone rather than free speech.

Legal experts of Elon Musk stated that it was difficult for him to do so. 

Here we discussed and witnessed a business deal which could not be completed due to several reasons. Both advantages and disadvantages of business deals have been mentioned above. I will request you to go through this article before negotiating a business deal.