The decision whether to re-brand following an M&A transaction can be a difficult one for companies to make. In order to maximize the value from the acquired brand, companies need to decide whether transitioning the asset to a new brand is the appropriate strategy, how to go about rebranding the acquired asset, and the appropriate timeline for completing the rebranding process. A recently published study by Landor of post-M&A rebranding trends offers insight into industry trends and timelines that can be useful for those considering if, when and how to rebrand after completing a transaction.
The study focused on rebranding trends of S&P Global 100 companies over the last 10 years. While more than half of all acquired assets were rebranded in the first three years, some industries rebranded faster and at a much higher percentage than others. Energy and utilities sector companies were the fastest to rebrand post-acquisition, with 60% of acquired companies transitioning to a new brand within the first 12 months. Healthcare, IT and financial services companies also showed a high rate of post-M&A rebranding but over a longer time frame, with 60% of acquired companies being rebranded within the first year and 76% changing brands within 7 years after the acquisition. Consumer companies showed the lowest likelihood of rebranding post acquisition, with only 56% of acquired brands being transitioned in the 7 years following the transaction.
The data generated by the Landor provides key insight into the post-M&A strategy that companies need to consider when going through the M&A process. When designing a post-acquisition strategy, consumer companies need to consider not only the financial aspects of the acquisition but also how to integrate the culture and image of the company being acquired so as not to destroy the equity of the brand that has been built up over the years. When Unilever acquired Ben & Jerry's, there was a very conscious effort by Unilever to preserve the culture and of the ice cream company. One of the main draws for Ben and Jerry's consumers was the brand's socially responsible image and philanthropic efforts and Unilever's integration of the brand that left that corporate identity intact ensured that consumers did not switch brands post-acquisition. Energy and utilities industry trend to rebrand the acquired asset quickly indicates that companies may be able to spend less time considering how to integrate a brand and whether rebranding should be done post acquisition than consumer companies, focusing instead on how to rebrand the acquired asset quickly following the completion of the M&A transaction.
The author would like to thank Olga Lenova, Articling Student, for her assistance in preparing this legal update.
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