When one company acquires another, executives have 10 distinct options for the corporate rebranding. Selecting the right strategy can set forth a compelling vision for the combined entity and send important signals to employees and the outside world.
Of the myriad complex decisions that senior executives make before and during a merger, one is mandatory and critical but often given short shrift: the branding of the new corporate entity.When executed effectively, a corporate rebranding can greatly facilitate the merger of the two businesses by sending the right signals to people both inside and outside the organization. In a study of more than 200 mergers and aquisitions completed since 1995 with a transaction value exceeding $250 million, the authors found 10 different strategies for a corporate rebranding. The 10 options can be grouped into four main categories that communicate fundamentally different messages: (1) This deal is a merger and we are adopting the stronger brand; (2) this deal is a merger and we are adopting the best of both brands; (3) this deal is a transformational merger and we are creating a new brand; and (4) this deal is simply a portfolio transaction and no brand changes will occur. In any M&A, executives need to select the right strategy with respect to three important constituencies: employees, customers and the investment community.