Post M&A Branding – Part 2 of 3 posts

Deciding which brand to absorb in the M&A

The true value inherent in the pre-M&A brands is often not researched and therefore not recognised. Fundamental branding decisions post-M&A are often driven by political or economic motivations rather than objective or strategic ones.

Post M&A branding is often limited in concept to simply re-naming the new entity – hugely important but in terms of a branding journey it represents only the beginning. Crossing this off the ‘to do list’ is not the end of the post-M&A branding activity. The name is a label, the logo a badge and the brand is the total experience created for your key audiences:

1. Employees 2. Customers 3. Shareholders 4. Suppliers

When it comes to choosing a brand model, the options are limited to the following:

1. The Survivor – the stronger and/or more relevant of the two brands is adopted.
2. The Evolver – the two brands become one new brand – part or all of the combined Brand Equity is absorbed to create a new evolved brand.
3. The Combo – the new brand retains the most valuable assets of the merging brands and presents a new brand model based on combining the two names.
4. Co-Existing – both brands co-exist – in acquisition mode, two or more brands are maintained and seen to operate independently of each other.

To select the most appropriate option it is necessary to understand the components that make up the individual brands (pre-M&A) and understand what the post-M&A brand composition is likely to be.

It is likely that the new brand will comprise the most positive attributes of the two merged entities. We need to decide what to retain, what’s duplicated, what’s good, what’s bad and what’s ugly.

Deciding which brand attributes are retained will form the basis of the new brand.

To achieve this we take a journey of brand discovery for each of the merging brands – values, benefits characteristics, differentiators, promise, attributes, drivers and loyalties are all explored with each of your key audiences.

Undertake analysis of brand perception from the two merging entities’ key audiences. When combined with input from M&A visionaries, architects and contributors, a new blueprint evolves for the new brand which details its unique structure and qualities.

The blueprint is then communicated back to the key audiences according to a carefully formulated brand communications campaign.

Finding the best branding options for your M&A

Accepted guidelines exist to steer a way through the complexities of the M&A process. Determining the most appropriate brand direction for the new entity is however, a complex affair devoid of guidelines yet requiring a skillset specific to the M&A branding objectives.

This is where advice from a competent branding professional is highly recommended.

The emotional impact of change on people can destroy the post-M&A process and acceptance of the new brand. It is likely that two camps will form within the merged entity – those for and those against the M&A. There may be fence-sitters but to the larger degree emotions will be polarised and loyalties tested.

M&A groups
For
Brand consultants
Accountants
Lawyers
Stock markets
Senior Execs
Banks (if funding)
Consultants
M&A managers
Auditors

Against
Employees
IT and systems people
Human Resources
Some directors
Managers
Banks (if losing a customer)

Perversely when all the corporate muscle flexing and late night boardroom bartering is over – when the entity should be stronger than ever it is potentially in a weak and vulnerable position.

The M&A is merely an opportunity, a starting point. From here it is poised to take advantage of the combined resources and opportunities. Conversely it may fail as the new engine fails to kick start, talented staff get nervous and uncertain about their future and head for the door, recruiting and re-training budgets escalate, competitors seize the opportunity to attack your customers while you are pre-occupied with the reactive challenges created by the M&A, shareholders react to the adverse sentiment generated by media comment suggesting an inappropriate and expensive branding exercise and resultant exposure of the board’s decisions whereby market value spirals increasingly out of control.

Look out for Part 3 of our three part series.
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