Brand power in mergers and acquisitions: why first impressions matter
Mid read
Mergers and acquisitions (M&A) have seen an increase in deal value in recent months.
From the outset, brand value plays a crucial role in M&A, influencing deal prices and organisational hierarchy. Although all too often the brand is overlooked in the process. Enhancing brand strength pre-M&A can help to maximise the deal value, whilst aligning internal cultures and establishing a clear brand vision post-M&A are vital for future stability and growth.
In the high-stakes world of M&A the strength and perception of your brand can significantly influence the success, and value, of a deal. Ensuring your brand is ‘game ready’ not only enhances perceived value but also plays a crucial role in shaping the new organisation’s culture and direction.
In this article, we’re going to focus on the role of brand in M&A, because whether you’re merging, buying or selling a company, the value of brand will affect the price paid or the consequential hierarchy of the organisational architecture.
The overall purpose of M&A is business growth. No M&A happens to make less money, or shrink businesses, and although this may seem obvious enough it highlights an important factor to consider: Is the brand(s) strong enough to grow? When these deals are being pored over, fleshed out and hotly negotiated there are many elements of the businesses that will be being discussed from cashflow to assets to dividends, but the initial stages is where brand value really needs to be considered.
…the value of brand will affect the price paid or the consequential hierarchy of the organisational architecture.
Adding value
When selling our homes, we normally kick things off with reviewing what needs doing to help increase its value – fitting a new kitchen, redecorating rooms, getting the boiler serviced, decluttering and perhaps even creating more space with a loft conversion. Although often requiring an initial investment of time and funds, understanding what the market values and adapting your home to meet the market desires are worthy investments when they help to maximise the sale price. The same applies to brands heading into a merger or acquisition phase. Ensuring the brand is looking and performing as strong as possible will only help to increase its overall value (longevity, scalability, existing equity etc) for acquisition or help to position it as the lead brand in a merger situation.
Establishing a compelling, relevant and galvanising brand vision as quickly as possible following M&A can help to align leadership, retain top talent.
Taking the lead
As brands also help to define internal cultures, it’s important to review how cultures may, or may not align when companies are being integrated together. If in the instance of a merger, just because one brand has been established longer than another, that doesn’t necessarily make it the clear choice to be the lead brand. If they younger/smaller brand is on the upward trajectory and has a strong internal culture, then it’s wise to take that into account.
Shared vision
It’s inevitable that M&A lead to periods of instability for the teams that operate within the organisations. What all personnel are looking for during this time is direction. If the business is changing/evolving, what’s the new vision? What should they all be looking to achieve together? What’s their North Star?
Establishing a compelling, relevant and galvanising brand vision as quickly as possible following M&A can help to align leadership, retain top talent and provide focus for the growth strategy, as well as help to communicate to external audiences (media, competitors etc) that this new era is one in which the brand is going to make a serious impact.
If you’re a brand owner navigating the complex landscape of M&A, consider how your brand’s current positioning, culture and vision align with your strategic goals. Remember, a proactive approach to enhancing your brand can make all the difference to where it lands, or how many tens of $millions it generates as a result.
If you’d like to discuss how best to position your brand for M&A, then contact us for a brand review and consultation.
Other insights by Vicki
About Vicki Young
Vicki Young (she/her) is Founder and CCO of Nalla. After working for two of the most respected creative agencies within the industry, she set up Nalla as a tribute to her late father, Allan.
A thought-leader in the branding space, Vicki’s insights are regularly featured in publications such as The Times, Creative Review and Transform Magazine.
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