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It’s time for our next special issue: a guest article by Tim Louis Schwarzmeier on why it’s important to look past the price in Indo-German M&A transactions.

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The author of today’s guest article is our fellow Riser Tim Louis Schwarzmeier, who is based out of Munich, Germany.

Tim is part of the Corporate Finance team at Baker Tilly, a global tax, audit, and advisory firm. A German with strong personal ties to India through marriage, he not only understands the intercultural business landscape between these countries but also recognises the importance of meaningful personal relationships and deep mutual understanding.

Drawing on his experience as an investment professional at a Munich-based private equity firm and several years of cross-border advisory work, Tim is committed to delivering high-quality corporate finance services while building long-lasting, trust-based relationships. He is particularly focused on strengthening Indo-German cooperation through M&A transactions between India and Germany. In addition, Tim informs regularly about the Indo-German corridor via condense LinkedIn posts via the hashtag #theEagleandtheLion.

Enjoy the guest article!

Tim is recommending this book on India’s famous Jugaad:

By Tim Louis Schwarzmeier

When the Chancellor of the Federal Republic of Germany, Friedrich Merz, visited India on 12 January 2026 and was warmly received by Prime Minister Narendra Modi in Ahmedabad, the meeting signalled more than diplomatic goodwill. It reflected a shared political intention to deepen economic cooperation between two increasingly important partners.

This political alignment is mirrored in investment flows. Germany ranks among the largest foreign direct investors in India, with cumulative FDI exceeding USD 15 billion between April 2000 and March 2025 as the foundation for intensified Indo-German business activity is firmly established. Yet the practical reality of cross-border M&A execution reveals that successful transactions depend on far more than favourable macroeconomic conditions.

In any transaction — from a household purchase to a multi-billion-euro corporate acquisition — price, contractual structure, and warranties ultimately determine whether a deal is signed. However, long-term transactional success is defined less by signatures than by sustainable alignment and mutual confidence between buyer and seller. Achieving this outcome is challenging when parties operate across markedly different legal, professional, and interpersonal traditions as underlying and non-spoken characteristics are often underestimated barriers.

While every transaction is unique, experience shows that Indo-German M&A outcomes are shaped in particular by three interrelated dimensions:

Understanding these dimensions is essential to moving from political intention to executable transaction reality.

In Indo-German M&A, differing approaches to trust formation can materially influence negotiation dynamics, transaction timing, and closing certainty. From a German transactional perspective, trust is derived primarily from contractual clarity and procedural reliability. Letters of intent, term sheets, and comprehensive transaction agreements are expected to define commercial understanding and legal risk allocation with precision. This structured documentation framework provides transparency, predictability, and enforceability - elements typically regarded as the principal basis for confidence in a transaction. Personal relationships are valued, yet they generally remain secondary to the robustness of the legal framework.

In India, by contrast, interpersonal relationships frequently constitute the cornerstone of transactional trust. Confidence is often built through longstanding business interactions, trusted recommendations, or sustained senior-level engagement. Establishing such relational trust may require significant time investment, but it plays a decisive role in enabling commercial alignment and maintaining transaction continuity. Contractual documentation remains important; however, it commonly operates alongside relational confidence rather than replacing it.

For Germans engaging with Indian parties, a deliberate strategy of active relationship development is therefore essential. Regular in-person engagement, meaningful senior dialogue, and culturally appropriate social interaction can strengthen confidence, reduce negotiation friction, and often accelerate execution. Conversely, underestimating relationship-building may undermine closing probability, even where valuation and principal commercial terms are already agreed. Bridging these trust paradigms is thus a core success factor in Indo-German transaction execution.

Divergent perceptions of time, planning discipline, and process control represent another critical dimension of Indo-German M&A.

German transaction execution is typically characterised by rigorous advanced planning and structured process design. Considerable emphasis is placed on mapping execution steps, identifying potential risks, and preparing for a wide range of contingencies. Adherence to agreed timelines is viewed as a hallmark of professional reliability. Delays may therefore be interpreted not merely as operational setbacks but as process risks capable of eroding trust and transaction certainty.

Indian counterparties often demonstrate greater tolerance for timeline flexibility. Transaction schedules may evolve in response to stakeholder alignment or renewed commercial assessment. Such adjustments are not necessarily perceived as diminished commitment but rather as part of a pragmatic and adaptive negotiation environment.

These differing expectations can produce mutual misinterpretation. German acquirers may read delays as insufficient seriousness or execution discipline, while Indian sellers may perceive strict deadline enforcement as undue pressure or inflexibility. Without careful management, these perceptions can generate avoidable tension and slow progress.

Effective stakeholder management is therefore essential. Both sides benefit from enhanced transparency, proactive communication, and more detailed expectation-setting than would typically be required in domestic transactions. Clear explanation of approval processes, regulatory dependencies, and decision timelines can mitigate frustration, preserve trust, and sustain momentum. A disciplined yet culturally informed approach to time management is consequently a key determinant of efficient execution and closing certainty.

Even where trust formation and time management are properly addressed, the style of negotiation and communication remains decisive in Indo-German M&A success.

Indian communication is typically contextual, nuanced, and relationship-oriented, often providing extensive background around the substantive point. Tone and directness may vary with interpersonal familiarity. Messages can be diplomatically framed yet commercially clear, requiring attentive interpretation. Verbal assurances and evolving understandings may precede formal documentation, while periods of silence often signal politeness, consultation, or strategic reflection, rather than rejection.

German negotiation culture differs markedly. Communication is generally direct, explicit, and fact-driven, emphasising clarity, efficiency, and precision. This approach reflects a professional environment grounded in documentation discipline, structured data-room processes, and written confirmation of agreed terms. Ambiguity and informal understandings are typically avoided. Silence is therefore more likely to indicate disagreement or further analysis, not tacit acceptance.

These contrasting styles can create misalignment. German parties may perceive Indian counterparts as non-committal, while Indian sellers may experience German directness as overly rigid or confrontational. Awareness of these paradigms is therefore essential. German parties tend to prioritise procedural certainty and documented outcomes, whereas Indian parties often emphasise flexibility, relational harmony, and consensus-building.

Successful execution ultimately depends on recognising and respecting each party’s cultural and professional negotiation framework. This intercultural competence distinguishes purely technical corporate-finance capability from genuinely effective cross-border transaction management. Engaging advisers with specific Indo-German experience can be critical to mitigating misunderstandings, maintaining negotiation momentum, and safeguarding closing certainty.

Ultimately, the success of Indo-German M&A transactions will be determined not by valuation mechanics or contractual sophistication alone, but by the ability of counterparties to align across trust, time, and communication - the human dimensions that underpin every cross-border deal. As political, economic, and strategic ties between Germany and India continue to deepen, the opportunity for meaningful corporate collaboration will expand accordingly. Realising this potential, however, requires more than favourable market conditions; it demands cultural fluency, disciplined execution, and a sustained commitment to partnership on both sides.

Germany should move ahead with confidence and engage more closely with Indian political and business leaders. I’m convinced that stronger bilateral cooperation will translate into more resilient transactions, long-term investment stability, and a new phase of Indo-German economic integration. Having said that, looking past price and contracts is not merely an analytical exercise - it is the decisive step towards a common understanding ensuring that cross-border transactions do not only close, but endure and open the path to Indo-German success.

Sources: Anon., 2026. Bundesregierung [Online], Foundation, I. B. E., 2025. [Online]

For further information, please contact the author via LinkedIn.

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