Recently, I’ve been reading Shan Weijian’s memoir about leading Newbridge Capital’s acquisition of Korea First Bank. I was deeply inspired by the techniques and artistry he demonstrated in negotiation. Below are a few principles I’ve distilled to help form a more systematic understanding.
1. Always Think in Terms of Bottom Lines
All of Newbridge’s proposals were built on one fundamental principle: the investment had to make commercial sense. Based on this, clear red lines were established—rules that could not be crossed or compromised. For example, when the government demanded that Newbridge’s investment return not exceed 12%, Newbridge flatly refused.
Should non-performing loans be priced at 95% of face value or 96%? What does that 1 percentage point concession mean for overall returns? Only with a clear, quantified understanding can you know how many cards you hold and how much room you truly have to maneuver. An operational, flexible financial model is a must.
If you can afford to concede three dollars, start by conceding one. Save the remaining two as bargaining chips for when you need leverage later in the negotiation.
Agents and intermediaries serve two key purposes:
They help establish trust between previously unfamiliar parties and bridge differences in position (for example, diplomats or ambassadors acting as intermediaries between foreign investors and financial regulators).
They create an informal “buffer layer” through which tough messages can be delivered without triggering immediate or irreversible consequences.
For instance, Newbridge’s “ultimatum” in September 1999 could not be formally delivered to the government—politically, a government yielding to a foreign investor’s ultimatum was unacceptable. Instead, the message was conveyed via an ambassador: “This is the last opportunity. If it’s not signed now, there will be no chance to sign later.”
Winning the media battle can be important, but it often creates only localized pressure, and the direction of public opinion is hard to control. Shan maintained regular contact with journalists, which not only helped shape public perception but also provided insights into political dynamics and the progress of a parallel bank acquisition. At the same time, this engagement helped establish Newbridge’s image as professional, rational, and commercially driven in the eyes of the media and the public.
For financial regulators, the political and regulatory implications of certain agreements may matter more than the precise monetary amounts involved. Once Newbridge recognized this, it could adjust the form of the terms—without crossing its own bottom lines—to better satisfy the counterparty’s political needs, while leaving its financial returns intact.
7. Be Patient: Sugar-Coat Your Punches and Threats
Expressing firmness without breaking the negotiation is an art, especially when the other side makes unreasonable demands.
Instead of saying, “You’ve gone back on your word and broken your promises!”, say:
“We are confused and disappointed by your new proposal, which represents a significant step backward from the Hong Kong discussions that took place just one day ago.”
Instead of saying, “We’ve invested so much time and resources in this negotiation—we won’t walk away empty-handed, and we’ll sue if we have to,” say:
“We entered this process in good faith based on the government’s commitments, and therefore invested substantial time and resources to complete the transaction. Our investors will not allow us to walk away quietly. We will do our utmost to protect our rights, though we hope to avoid a mutually destructive outcome.”