General

M&A: Money does the talking but brand is the messenger

20 January 2021

Brand in M&A. Tony Allen, Brand Director at Gather and former CEO of Interbrand UK, explores why M&As can come a cropper and three things brand owners can do as they approach the negotiation to increase success.

“When I first said I wanted to be a comedian, everybody laughed. They’re not laughing now”. Bob Monkhouse.

As with all memorable one liners, leading into an M&A with one idea, to then cap it with a surprisingly clever twist makes for an ideal outcome. Brand in M&A is the clever twist.

Many M&A stutter not because the investment case dominates, but because they miss the human twist at the end. Gain versus sacrifice is the M&A conundrum. Not many mergers are “equal”. Saying they are, mollifies worriers and projects stability to investors. Companies are people, who take assets with them when they leave. Things can become very symbolic in a merging situation and not always in a helpful way. Branding in M&A has to be handled differently to a regular refresh.

 Where it goes well, merging organisations work on instinctive principles of fission and fusion – apart they are fierce rivals, but together they can dominate others. The impulse to combine for a greater upside makes a human and a business case. A bigger, better version of yourself opens more career choice and a lot more fun.

 When it goes less well, merging parties are pressured. They know that the price for climbing the ladder will be rationalisation later which will create anxiety for employees. Where it also goes poorly is when brand owners are reluctant to budge on their brand but in the desire to merge, end up compromising badly. This can result in an unmerged pickle or a re-naming project that kills the original impetus.

Three things brand owners can do as they approach the negotiation:

 1) Study success. Plenty of M&A branding outcomes show that determined negotiations with clear red lines produce promised post-M&A results fast. The leaders of Price Waterhouse and Coopers & Lybrand feared being mocked if they were “too slow”. Professional paranoia motivated them. Both moved impressively fast. Their red line was their new brand. It had to project a “greater idea” than either of the legacy firms. Pulling this off reduced the level of internal carping almost to nil. There was very little PwC got wrong.

 2) Lead from the top. Everything looks symbolic in a merger. From the person who gets the job of leading, to how the various contributing teams are arranged. CEOs are often so busy fielding other priorities that the job of running a branding project is delegated to a merged team from the two “sides”. They are told to play nicely but the job of conceding ground is not in their remit. The top people have to lay down the rules and use their colleagues to execute.

 3) De-spin communications. Over-spinning upsides can highlight the reverse (airline mergers come to mind). The role of an M&A brand exercise is to precisely signal what will be better, what will be worse, when and how. This means conducting value proposition work with a toothcomb, removing exaggeration and alighting on gains for customers that can be genuinely delivered.

Successful branding in a merger communicates future strategy. Identifying future strategy is the easy part. The harder part is deciding what to call yourself. That’s where human interest really kicks in.

If you are interested in how we can support you with M&A branding, please email rochelle@gather.london