Whether you are selling your business or are already deep in a transaction, one thing is clear: the clock matters. M&A transactions are among the most time-sensitive processes a business leader will manage, and the cost of delay, often dismissed as an inconvenience, can be catastrophic to deal value and deal certainty. This article explains what causes deals to stall, the real consequences of delay, and how experienced M&A advisory support keeps transactions on track.
A short, confidential discussion can help clarify timing, process and where delay risk typically emerges.
What Do We Mean by Deal Delay?
Deal delay refers to any period in which a transaction stalls beyond its expected timeline, whether during negotiations, due diligence, regulatory approval, or the final stages before signing and closing. Some delays are unavoidable, but the majority are not. They are caused by poor preparation, indecision, incomplete documentation, or a failure to manage the process actively. In M&A advisory practice, we distinguish between deals that are progressing and deals that are drifting. A drifting deal is one where momentum has been lost, communication has become infrequent, and neither party is driving urgently toward close. These deals are at serious risk, and the longer they drift, the harder they are to rescue.
The Real Cost of Delay
Delay is rarely perceived as a crisis in the moment, but its cumulative effect on a transaction is severe. The most immediate risk is valuation erosion: a business’s value is tied to its financial performance at a specific point in time, and if trading performance dips even modestly during a prolonged process, a buyer is entitled to renegotiate the price. Alongside this, buyer confidence deteriorates. Extended timelines signal uncertainty, causing buyers to question whether the seller is committed, whether undisclosed issues exist, or whether a better opportunity lies elsewhere. Confidence, once eroded, is difficult to restore.
Market conditions shift, financing pressures change, and buyers pursue competing priorities. A deal that drags gives buyers time to reassess capital allocation or simply lose appetite. Key personnel become disengaged. And deal fatigue sets in: legal and advisory costs accumulate, goodwill erodes, and decisions that were straightforward early in the process become contentious. By the time a delayed deal approaches close, both sides are often entering it with depleted goodwill and frayed relationships.
What Causes Deals to Stall , and How to Fix It
In our experience, the most common trigger is poor preparation on the sell side. If a seller cannot produce due diligence documents quickly and completely, buyer confidence erodes and the process stalls. A well-structured virtual data room, built before the process launches, is the single most effective safeguard. Legal and structural issues are equally preventable: title disputes, shareholder agreement ambiguities, or pending litigation can halt a deal entirely if they surface during buyer due diligence. Vendor due diligence identifies these proactively, before they become deal risks.
Misaligned expectations on price or structure, unmanaged governance processes, and divided leadership attention are the other common culprits. Board approvals, committee sign-offs, and regulatory clearances must be mapped and sequenced from the outset. And when the CEO or CFO is also running the business day-to-day, response times slow and momentum is lost. A dedicated advisory team on both sides is essential for keeping a deal alive.
We often work with owners and boards before a transaction begins to remove delay risk and maintain momentum.
When Delay Becomes a Deal Breaker
Delay does not affect all deals equally. In certain situations it is particularly dangerous:
Founder-led businesses: A lengthy process is especially high-risk where the business is heavily dependent on the founder’s involvement. Any sign of underperformance during the process gives buyers grounds for price adjustment.
Competitive auction processes: Delay by the preferred bidder creates an opening for competing parties to re-engage. Sellers who believe they have a done deal can find themselves back at the negotiating table with a less attractive buyer.
Regulatory transactions: Where competition commission review or foreign direct investment screening is required, managing everything within the parties’ control with maximum efficiency is critical , regulatory delay must not compound avoidable delay.
Cyclical industries: A delay of even two to three months can mean the difference between closing at peak valuation and closing into a sector downturn. Market timing is rarely discussed as a deal risk , but it should be.
How Merchantec Can Help Keep Your Deal on Track
At Merchantec, keeping transactions on track is at the core of what we do. We work with CEOs, CFOs, and business owners from initial preparation through to signing and close, getting businesses transaction-ready before a formal process begins, providing independent valuations that anchor your negotiating position, and actively managing the transaction timeline to prevent the bottlenecks that cause deals to drift. When a transaction has already stalled, we step in to diagnose the delay, re-engage parties, and develop a clear path back to close. The cost of delays in M&A is real, quantifiable, and often irreversible. The businesses that complete transactions successfully treat momentum as a strategic asset and protect it accordingly.
A confidential discussion can help you structure the process and avoid value‑eroding delay.
