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Merging Brands Part I: Types of M&A Brand Transitions

Mergers and Acquisitions are back in the news. Last week, Virgin Media approved an acquisition by Liberty Global. And American Airlines can’t get enough of the media spotlight — this week they announced an unexpected merger agreement with US Airways.

Financiers expect to see an increase in M&A activity as companies sit on high levels of cash and financing remains cheap. Read this article. But what effect does a merger or acquisition have on a company’s most valuable intangible asset: its brand?

Every situation will be vastly different. Companies may choose to brand their merger or acquisition in three primary ways:

  • Both companies retain their original brands and names. For example, although Virgin is being acquired, it is keeping its name and brand — the Virgin brand is already strong, and likely part of the attraction in the acquisition. Liberty Global, the acquiring company, is also keeping its brand identity.
  • One company — usually the acquired — transitions its brand and identity to the other. The classic example is Kinko’s. The printing company had widespread brand recognition when it was acquired by FedEx, but over a period of several years, evolved into FedEx Office.
  • Third, the newly merged organization can choose an entirely different name. Recently, a merger between Georgia Gulf and a former division of PPG resulted in Axiall. Take a look at our rebranding effort for Axiall.

There are a multitude of factors that must be taken into consideration when making the important decision of how to brand a merger or acquisition. In part II of this series, we’ll discuss some of those factors.

Please comment on this post if there are certain things you would like to see explored in future posts as part of this series.

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