The Challenge of M&A Transactions
The Challenge of M&A Transactions

Brand Strategy as a Decisive Success Factor for Merged Brands

Merging two companies – strategically, culturally, and from a brand perspective – is no easy task. Today, the brand encompasses the core offerings and values of an organization and has a significant impact on the performance of a merging company. Transaction parties must consider both the strategic and operational implications of brand decisions they make for their M&A success.

Through M&A transactions, companies can seize opportunities, such as accelerated growth and enhanced innovation. However, the viability of a newly merged company hinges on the right strategy – both within and outside the organization. As noted by Lars Schweizer, Professor of Management and Microeconomics at Goethe University in Frankfurt am Main, between 50 and 60 percent of all mergers fail. (https://bajour.ch/a/clfh0nw18102512354ixbyrchk3m/uebernahme-der-cs-durch-die-ubs-das-sind-die-offenen-fragen). Acceptance and rejection often exist in close proximity in M&A transactions.

As intangible assets, brands are typically not reported on balance sheets. Consequently, they are rarely subjected to specific due diligence assessments prior to acquisitions or mergers. Nevertheless, the successful transition of a brand is a critical aspect of integration, and brand strategy is key to communicating a coherent vision for the future both internally and externally.

When the strategic rationale for an M&A is announced, a well-developed narrative about the future brand strategy should also be presented. It provides a critical foundation for the integration strategy and sets the direction from the outset. The success of the integration and the future of the combined business could depend on it.

Every Mergers and Acquisitions deal brings with it complex branding challenges and raises questions such as: What is the right brand structure – House of Brands, Sub-brand Strategy or One Brand Strategy? How can the newly emerging brand be differentiating, authentic and relevant at the same time? And how can employees be engaged: How can identification be created (keyword: Internal Branding)? Corporate acquisitions and mergers always offer the opportunity to cultivate positive values and finally get rid of the undesirable factors of the old company.

The art of successful rebranding in Mergers and Acquisitions is based on a thoughtful strategy that encompasses every step from the moment of selection to the seamless integration of the new brand into all areas of the company. It is about setting the right brand-specific course to ensure brand attractiveness for the target audience as well as differentiation in the competitive environment.

Furthermore, the internal perspective is of great importance when bringing together different corporate cultures: The brand’s ability to deliver and thus its credibility creates a high potential for identification and acceptance among employees, business partners and, of course, customers.

In the successful M&A rebranding project involving banks EFG International and BSI, Brandpulse worked closely with EFG International. The goal was to position the brand as a private bank with an entrepreneurial spirit. This enabled the merged EFG brand to consolidate its position in the global banking sector and increase brand awareness (https://brandpulse.ch/en/work/efg-international/).

Despite the UBS takeover of Credit Suisse, both Swiss banks continue to navigate significant integration challenges in the M&A sphere (https://www.reuters.com/business/finance/ubs-unveils-big-branding-push-after-credit-suisse-takeover-2024-01-23/). It is now of great importance to strengthen the merged brand and consolidate its position in the global banking sector. A clear brand strategy can help UBS sharpen its image and offer its clients a unified and consistent brand experience.

As a leading Swiss brand agency, Brandpulse is convinced that brand questions need to be addressed early in an M&A process to optimize transaction value. Too often, we see companies announcing synergies and one-off implementation costs without providing clarity on the future brand strategy of the combined organizations.

Based on our extensive experience in defining M&A brand strategies, Brandpulse has developed a standardized M&A brand strategy process that addresses the key factors of brand decision-making. This enables us to provide clear recommendations regarding the future brand strategy. The advantage of the standardized process is the speed of the outcome along with precise quantifiable costs.

In today’s world, the brand is an increasingly valuable asset. Brandpulse advises companies on the development of targeted brand strategies and brand concepts and supports them in their successful implementation.

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