M&A Surge Drives Rebranding: Here Are Your Options
Jim Heininger shared the following story for executives initiating mergers or acquisitions on how to address rebranding options. This story originally appeared in Forbes: https://bit.ly/3GloltT
Rebranding is on the rise this year, states Forrester—especially in the B2B marketplace. The primary driver, according to the research, is the surge in global mergers and acquisitions, which hit 62,000 transactions in 2021 that surpassed $5 trillion in combined value, an all-time high.
Rebranding can create long-term business value.
According to a 2020 analysis from Brand Finance, the decision to rebrand in a merger carries less risk than not doing so. Mergers and acquisitions have always been one of the primary drivers of rebranding, as the transaction requires a structural change that needs to be addressed to hopefully open future opportunities. The brand has probably been evaluated as one of the top assets of the legacy companies, along with its product portfolio, production capabilities and customer relationships.
As the founder of a firm that specializes in rebranding, I’ve seen firsthand how a rebrand can help even the most established company grow, whether that’s entering a new business category, more clearly showcasing its value proposition or engaging team members behind a new customer promise.
So, what are the rebranding options following a merger or acquisition?
Rebranding decisions most frequently reflect the structural executions. Are you merging staff, operations, leadership teams, product lines, distribution channels, etc.? When merging organizations, there are a handful of options to consider:
Maintain the current legacy brand name and architecture. While this somewhat defeats the cost-saving opportunities associated with the acquisition, it could be considered when two merged organizations both have strong equity and enthusiastic customer bases that don’t deserve interruption. Or if a company is being acquired by a large corporate player with a “house of brands” structure (think P&G or Unilever) and the brand stays independent and maintains its name and positioning.
Combine strong brands together. When both brand names bring strength to the parties, combining them is an option that sometimes is effective. When oil companies Exxon and Mobil merged, they kept both brands, becoming ExxonMobil. When Disney acquired Pixar studios, they knew the value both brands held, so they simply added Disney before Pixar in all logo applications.
Unite behind one brand. Choose to unite behind the brand name that research shows has the strongest equities, customer recognition, potential, value and positive reputation in the industry. While that is usually the acquirer, sometimes the acquired brand wins out, such as when AlliedSignal acquired the more broadly known Honeywell.
Create a new parent corporate brand name, but maintain separate brand names of the legacy companies. Position them as “A New Brand Company” under the umbrella of the parent name. When Guinness and Grand Metropolitan merged, they created the new corporate name Diageo yet kept most product and sub-brand names. This is a more cost-intensive approach as you need to build relevance and meaning behind the new corporate name but pays off if future acquisitions are in the plans.
Create a new corporate structure with a new brand name. Rebrand the individual legacy companies under the corporate name as you merge teams and operations. The popular SunTrust Bank and BB&T financial institutions gave up their established brand names when they merged and took on the invented name Truist Bank.
Create an “elastic” brand. This option is great if you are planning more acquisitions to expand the product portfolio in a common customer space. This usually means a less descriptive brand name and one that focuses on high-level gains for working with the company. For example, we merged three linen providers in the hospitality industry as 1Concier, an umbrella brand that allowed the private equity owner ease in adding more industry providers under the strong service brand name.
Rebranding is more than a name change.
Rebranding should be viewed as more than just a name change, especially when it supports the merger of one or more entities into a promising new entity and other profit-producing strategies.
As with every rebrand, the goal should be to create a new brand that works hard in the marketplace, is packed with meaning, advances your story among customers and prospects, and shines a light on the new product portfolio the merged company delivers. But ideally, the rebranding can serve as both the motivation and glue that drives your integration efforts. The new brand should be reflected in your go-to-market strategy as a single company, and it should bring consistency to your market presence, which means you’re not having to overmanage multiple brands. And most importantly, a new brand can unify your employee base, providing an inspiring new employer brand platform with purpose, culture and performance, and a dynamic new recruiting message.
My firm recently rebranded a B2B player in the hospitality and healthcare market. A private equity firm had purchased a carve-out (the sale of a specific profit center within a business) from a major retailer and combined it with a previous stand-alone acquisition with a narrow market niche. For six months, while the rebranding process was put into motion, we supported the integration efforts with a leadership communication campaign behind the theme of Becoming One. The timeline supported updates on becoming One Company, Team, Culture, Product Portfolio, and eventually One Brand. The rebrand could then clearly demonstrate the promise of the acquisition and the benefits to customers, prospects and the industry.
Proper execution prevents merger anxiety.
Rebranding during an acquisition can be challenging as skepticism is at an all-time high. Employees are worried about the company’s future direction and concerned more about the loss of their legacy company standing than the opportunity of the new one. Customers are wondering if cost-cutting moves may impact their favorite products or the sales reps they’ve built a relationship with. And competitors are waiting in the wings, quick to call out changes within the new entity that might give customers a willingness to consider changing providers. All these require a thoughtfully executed rebrand with purposefully orchestrated communications and compelling new brand messaging that accelerates the relationship.