What’s Branding Got to Do With M&A’s?

Let’s play a branding game. Consider the following M&A scenarios:

• A global leader in payments technology makes more than 25 acquisitions on five continents to drive growth and innovation against emerging tech upstarts.
• A major investment firm completes a series of acquisitions to fortify its strongly stalwart parent brand with scrappier, more risk-forward subsidiaries.
• Two nationally known rival professional services firms merged to grow their share and achieve significant economies of scale.

When would you bring branding into each picture? Once the integration has started? After the customers and employees have heard the news? How about earlier?    

Successful M&A Transactions Give Branding a Priority Seat

In the above situations, here’s what happened when branding was neglected early on in the M&A process: The payments technology leader nearly failed in its acquisitions because, at first, it decided not to touch their already-established individual brands. The result? The marketplace and employees alike who were eager for a newly merged brand to transform their experience were confused and left grasping for answers. The investment firm undertook extensive market research that defied their assumptions. Instead of simply absorbing its subsidiaries into its behemoth brand, a melding of the two seemingly incompatible “old guard” and “new guard” identities was the way to go. Discovering that early was imperative. And the two rival professional services firms? The merger could have failed if they continued down the path their instincts led them: to convey the growth and economies of scale that made it a good deal FOR THEM. But, instead, fears of layoffs plagued employees and clients feared increased prices as they both yearned for the “why”: the compelling brand story and clear benefits that communicated why everyone outside the boardroom should be excited, too. Branding is often an afterthought once a merger or acquisition is well underway. But that can be a tragic mistake. No other initiative can provide the unity, clarity, and solidarity necessary for M&A success before, during, and after the transition. But how do you build a brand when you don’t have the puzzle pieces of a merger or acquisition in place? In this context, branding is more than a name, logo, or tagline. Your brand conveys the reason your business exists and how it intends to have an impact. It gives customers, employees, partners, and investors a reason to believe that the merged entity will benefit them. If those considerations aren’t laid out from the beginning, then what’s the point of the integration? How will you convince any stakeholders outside the money holders to rally around it?

What Branding Does for Your Merger or Acquisition

Listen. We know it’s hard for marketing and branding to get a seat at the M&A strategy table. Why should you push for it anyway? It all comes down to certain imperatives. We’ve included a snapshot below:

• Branding teams can work in tandem with integration management companies (IMOs) because much of what they do overlaps. Market research, project management, and deliverables can be shared from the start.
• This is essential because branding can help identify and address market attitudes early on. You could assume you know how your customers will react to the news or what questions or concerns they’ll have, but those assumptions are often dangerously misinformed. And, once you lose your stakeholders, it’s that much harder to win them back.
• Employee attitudes can make or break a merger or acquisition as much as customer sentiment. And, yes, branding can help with that, too. A powerful new brand can help bring together diverse workforces, mindsets, and cultures, uniting employees around a common value proposition and purpose.
• What’s in a name? Everything. Naming a company, product lines, and services during a merger or acquisition is critically important and should never be left decided at a midnight brainstorming session. Instead, it’s an essential piece in a brand architecture strategy, and no two strategies are the same.
• And while branding should be part of M&A preparations from the onset, successfully unveiling the brand can be a delicate matter of timing. The earlier you consider it, though, the more time you have to reveal it, whether incrementally or all at once. Remember that hundreds of digital and physical assets are affected, so use your time wisely.

We’ve said it before: In an M&A deal, branding is a crucial means to finding the connective tissue within a newly merged company. And involving branding and marketing from the get-go in your M&A process will not only ensure a powerful merged entity but also a healthy overall integration.