Article

At BrandTrust, we find time and again that the topic of brand is often misunderstood or neglected in corporate transactions - even though the strategic branding tasks involved in takeovers in particular are diverse and promise enormous potential for success.

The fact is that the brand strategy - whether fully developed or not - influences the entire course of any post-merger integration (PMI).

The brand is one of the success factors in M&A projects

What could happen if the acquired brand is eliminated? This is the worst case scenario: Employee pride is lost, productivity decreases and turnover falls. Customers migrate and employees leave the company, which was still flourishing before the takeover. Instead of the hoped-for synergies, dissynergies and cost increases arise. A nightmare begins.

Anyone who thinks of a brand only in terms of a logo and design fails to recognize its powerful influence - which is why brand experts should be involved in an M&A process. Here are a few fictitious examples to give you a better idea:

• The energy drink company Monster is taking over arch-enemy Red Bull and skewering the "red bull" with a one-brand strategy.
• Lindt & Sprüngli want to dominate the Austrian confectionery market and buy the traditional Manner brand. The products remain, but the pink cult brand disappears.
• VW takes Porsche's takeover attempt personally and "punishes" its employees, customers and fans with a brand integration because a one-brand strategy promises synergies.

Yes, these examples sound unrealistic, but decisions like these are part of everyday M&A life. In cases like these, the planned synergies only exist on an Excel list, they would never become reality - and that jeopardizes the success of the project and the future of the target company.

Every M&A process is different - this also applies to brand integration

There are no standard rules as to how the brand should be integrated into a takeover process: whether broadly across the entire process or deep into the workstreams. This must always be analyzed and decided on a situational basis.

One thing is certain: brand expertise, the right strategy and the necessary level of sensitivity make the difference between success and failure in a transaction.

If there are no fixed rules, what is the best way to incorporate the brand into an M&A process in order to achieve the maximum? We recommend the following approach: